Global Economy
United States
At present, all focus is on debt in the US as the world waits
patiently for a resolution to the debt ceiling stalemate, which if
reached by August 2nd, will see the US government avoid an
unprecedented default. This follows disappointing data in May
continued to cause question over the strength of the US economic
recovery with unemployment ticking back up to 9.1% and the
Institute for Supply Management Manufacturing index recording
its largest monthly decline since 1984.
Europe
Like the US sovereign debt continues to plague the European
peripheral countries and significant concerns have again escalated.
The concern has been that any Greek defaults might set off a global
credit crisis much as Lehman's failure did in 2008. However
French and German banks only have Greek debt exposure of US$53
billion and US$34 billion respectively, which is manageable.
