Greece: Europe's Lehman Brothers? | Elliott Wave International

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Greece: Europe's Lehman Brothers?
Could Greece suffer the same bailout refusal as Lehman?

By Vadim Pokhlebkin
Fri, 03 Jun 2011 18:00:00 ET

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When the financial crisis hit hard in the fall of 2008, the Federal Reserve Bank made the now-infamous decision to refuse to bail out the Wall Street giant, Lehman Brothers.

Today, the eurozone authorities are losing patience with Greece.

The Financial Times reports that, “almost every element of the new [bailout] package faced significant opposition from at least one of the governments and institutions involved...” Could Greece suffer the same bailout refusal as Lehman?

To most market observers, that seems unlikely. But here at EWI, we are not "most market observers." Our European Financial Forecast editor Brian Whitmer gives you his socionomically-derived answers in the opening pages of the June issue.

Also in the June European Financial Forecast:

FTSE: A year ago, in April 2010, disjointed rallies across the banking, real estate and retail sectors provided our European Financial Forecast a “flashing signal of poor market health.” The timing proved important: The FTSE 100 soon fell in a 20-percent sell-off. Find out how the same three sectors have been doing lately as measured against the recent FTSE 100 highs.

Germany and France: The DAX and CAC 40 both saw choppy, overlapping declines in May. To an Elliottician, this hints at the nature of the move (impulsive or corrective) and is an important clue about the trend. Learn whether we think buying German and French equities is a good idea right now.

Swiss Franc and Euro: Risk Aversion! May's all-time high in the Swiss franc against the euro is a sign of risk aversion spreading across Europe. The EUR/CHF approximates the amount of money flowing in and out of Switzerland from the eurozone -- and lately, the eurozone has been losing. But what about another biggie, the EUR/USD, euro-dollar exchange rate? More than 75% of futures traders remain bullish on the euro. Before you join them, see the Elliott wave-labeled charts in the June European Financial Forecast.

All-Powerful ECB: We've noticed that you can actually gauge a market’s trend by studying the public’s “level of faith” in its potent directors. You see, bull markets inflate the belief in the power of central banks, while bear markets expose officials’ incompetence. What does the current level of the public's faith suggest? Our analysis of a recent interview with Luxembourg Prime Minister Jean-Claude Juncker about a “secret meeting” on Greece explains.

Special Section: What's Next for Europe? European Financial Forecast editor Brian Whitmer recently gave an interview to the German online newspaper, Wirtschaftsfacts [Economic Facts] Read the 11 insightful Q&As on the last two pages of the June issue.

Tap into these insights right now via a RISK-FREE, instant-access subscription to The European Financial Forecast Service. Subscribe today, and you'll also get instant access to the still-valuable May 2011 European Financial Forecast. Details >>

Tags: AEX, Bank of England, CAC40, DAX, diversification, Elliott wave, euro, euro stoxx 50, eurozone, euro/USD exchange rate, european central bank, European Union (EU), eurozone, FTSE, Greek debt, Irish debt crisis, Lehman Brothers, risk appetite, Sovereign Debt, Swiss franc, Swiss Market Index (SMI), technical analysis

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