With a tsunami its not the first wave that counts, it’s when the water recedes and then ever so slowly a second wave approaches that the alarm bell should sound. It looks like it’s a small inconsequential shift in the tides, but then the water rushes towards the beach and all is lost.
That’s one reason to keep a close eye on the Greek events. Portugal, Ireland, Italy and Greece are all thought to have unsustainable debt levels leading to the need to impose austerity that in turn is feared will trigger social unrest.
A flight to safety causes the dollar to increase in value and undercuts the US recovery.
We are not out of this financial crisis by a long shot.
Yves Smith at Naked Capitalism points to the role of the investment bank everyone loves to hate in covering up the mess that was building up.