By Dr. John E. Charalambakis
(c) Friedrich A. v. Hayek Institut, C. Ohmeyer
Over the course of the last several months a sense of market stability has prevailed. This can be seen in the low yields of government securities around the globe, signifying that for even risky countries the country-related risk is declining, and prospects constantly keep improving. However, this past Thursday’s mini market turmoil was primarily blamed on the Portuguese bank Banco Espirito whose shares dropped by 17% in one day, triggering a wider selloff of equities throughout Europe and causing some minor tremors in US markets too. In addition, companies and banks from Span, Italy, and France as well as countries like France and Greece slashed their debt offerings or cancelled them completely, signifying that clogs remain in the financial system of Europe.
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