The eurozone is ailing, and that was before the problems in Ireland truly came to the fore. While Europe struggles, exchange traded funds (ETFs) might be the perfect hedging opportunity.
Growth is almost non-existent, which makes it hard for the debt-ridden PIIGS to emerge from their problems. The bad news is that weakness may continue.
Charles Hugh Smith for Daily Finance reports that Spain is struggling with a burst housing bubble and the eurozone’s worst unemployment rate – around 20%. Greece is full of political strife and while they received $140 billion from other eurozone countries and the International Monetary Fund, they are running a deficit equal to 13.6% of its GDP. [Europe’s ETFs Fall With Riots.]
Neil Shah and Quentin Fottrell for The Wall Street Journal report that Ireland is keeping its head above water by pumping millions into the troubled lenders. Unfortunately, the continued troubles have put Ireland front and center as the newest face of Europe’s crisis. The Irish government said that the total cost of fixing its banks could total as much as $68 billion, or about a third of the country’s economic output last year.
Europe can’t even get a break from its currency. Nathanial Crawford for iStock Analyst reports that the euro has rebounded thanks to the anticipation of more quantitative easing from the Federal Reserve. The downside? Europe can’t count on much-needed export growth with strengthening currency. [The Cup Is Half Full for Europe’s ETFs.]
- ProShares UltraShort MSCI Europe (NYSEArca: EPV)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.