It looks like this problem will stay for us for some time.

From an interview with Ferguson, the noted Harvard historian, on CNBC.com.

Spain has been lobbying the European Central Bank (ECB) not to put an end to its 442 billion euros ($542 billion) funding program this week, but a central bank official said the ECB will make sure the process will go as smoothly as possible.

"I've been nervous about European banks for quite a long time," Ferguson said in an interview.

He added that he was "amazed" about how long it took markets to realize that there was a problem with European banks, which were more leveraged than US banks, and that the assumption had always been that European governments would never do something like the US did in the case of Lehman.

"But that assumed that European governments had very deep pockets… the Greek crisis revealed the limit of this largesse," Ferguson said.

My view. Today the futures are very weak. The news is that markets are realizing the European crisis is not going away in the near future. The concern also deals with China. Its growth seems to slow down. I have shown this for some time in my The Global Business Cycle to the subscribers of The Peter Dag Portfolio.

The impact of the this global crisis is very slow economic growth, according to Ferguson and Roghoff (financial historians). It translates in slow growth in personal income. I am not sure people are planning for this possibility.

Good luck to all of us!

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

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