This week, citizens of Spain were revolting in the streets over new austerity measures in attempts to reduce the future debt obligations and to qualify for the bailout funds. Even after the austerity measures, consultancy group Oliver Wyam determined that Spain’s banking industry would need an additional 59.3 billion euros to deal with the economic turn down. This is 59.3 billion euros in addition to the austerity measures and nearly 100 billion in bailout funds. In addition to this bad news, Germany, the largest economy and likely saving grace of the eurozone has seen a significant drop in manufacturing and the business climate report.
Back on our side of the pond, we saw one of the largest net withdrawals of funds from mutual funds in the U.S. by institutions in months regardless of the promise of QE3. We also saw a worse than expected Chicago PMI, falling consumer sentiment, GDP falling short of expectations and lower than inflations numbers and a terrible month for real estate. The house of cards is beginning to sway, the question is how long can new cards be added to sustain the already shaky house.
