European debt still weighing down growth
EUROPE'S massive debt burden continues to depress the region's growth and explains why central banks intend keeping interest rates down for as long as possible.
If short-, medium- or long- term mortgage and other rates were to rise, many households and businesses would be under water. It is thus curious that US fund managers, in particular, are ignoring risk and pouring money into European stock markets. Average price-earnings ratios of Germany, France, Spain and Italy range between an expensive 16 and 21.
Besides the possibility of a stockmarket downturn, US fund managers could lose if the euro, sterling and other European currencies decline in tandem with an economic downturn.
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