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If They're Not Sinking, Why Are They Bailing?
GAINESVILLE, Ga. / May 4, 2011 -- In months past, European authorities remained confident that the sovereign debt crisis plaguing Greece and Ireland would not seep into Spain, Portugal and beyond. But analysts at Elliott Wave International reiterated their assertion that the recent “bailouts” of European countries would not allay mounting fears of default.
As the chart to the right shows, "The cost of insuring the sovereign debt of these countries is now well past the extremes registered at the worst of the 2008-2009 credit crisis. Even as the countertrend rally in stocks holds up, Portugal teeters on bankruptcy, and an even bigger disaster, Spain, waits in the wings." - Elliott Wave Financial Forecast, April 1, 2011
With Portugal joining the list of ailing euro economies as the latest country to accept international aid, most traditional economists once again breathe a sigh of relief. Yet analysts at the Georgia-based financial forecasting firm insist instead that it is "2008-2009 all over again. The only reason that 'legal' defaults aren’t happening now is that it’s 'not in anyone’s interest for anyone to default.' In the next phase of the bear market, money will disappear and there will be no choice."
For a copy of the report referenced above or to schedule an interview with Elliott Wave International's European analyst, Brian Whitmer, contact alexandral@elliottwave.com, 770-536-0309.