I spent a few minutes with my friends at Fox 26 Houston on Tuesday discussing the issues surrounding the Greek financial/debt crisis and also the one thing that no one is looking at - China.
As I wrote earlier this week:
"Whether, or not, a Greek exit from the Eurozone or a potential debt default is "the thing" that sparks the next major correction in the markets is unknown. Historically, such a widely "known" event is generally already factored into the markets and has much less of an impact when that event eventually comes to fruition. As Art Cashin suggested this morning:
'I think China may be more important than Greece. Stick with the drill – stay wary, alert and very, very nimble.'"
As I discuss in the interview, take a very close look at the chart of the China Shanghai Index bubbles and busts overlaid with the S&P 500 index. There is little discussion about the debt/speculative bubble being blown in China for the third time. It is unlikely that the third time will be a charm for China or the U.S. either despite hopes that the "past is not prologue."
As I concluded previously:
"The current belief is that the economic environment is stable, and growing enough, to support and foster continued expansion in domestic markets for the foreseeable future. Of course, that was also the belief at the peak of the previous two bubbles as well.
I think that Art Cashin could very well be right. Greece may not be "the thing." We need to keep a close eye on China as it may well be the leading indicator for what happens next in the U.S."