SOURCE: John Thomas Financial

John Thomas Financial

May 30, 2012 08:33 ET

John Thomas Financial Chief Economist Says Eurozone Crisis Coming to a Resolution

NEW YORK, NY--(Marketwire - May 30, 2012) - The Eurozone crisis is winding down according to John Thomas Financial's Chief Economist, Mike Norman. The crisis, which has been ongoing for the past three years, is coming to a resolution, he said.

"With the ECB now deciding to support the entire banking system by guaranteeing sufficient bank liquidity, the risk of bank failure is eliminated, as are the prospect of bank runs," Norman observed. "Moreover, collateral requirements are low enough to ensure that most institutions easily get over the bar."

Norman added that the recent elections likely put an end to austerity and that's a big positive. It will allow the economies in Europe -- particularly those at the periphery -- to stabilize and start growing again at some minimal level.

In addition, the ECB will continue acting as a fiscal agent through its purchases of Eurozone bonds, ensuring that governments are "funded" to meet debt service payments and continue providing crucial services. "Unemployment should not rise appreciably from current levels," stated Norman.

With the crisis subsiding, Norman predicted that markets should begin discounting a more stable environment and that will work to the benefit of the "risk on" trade. "Stocks should do well for a while as the worst is over."

Norman did throw in one caveat: he said things are likely to stay positive until sometime later in the year, when we get into the U.S. related issues of the debt ceiling, the election and the fiscal "cliff." The latter refers to the expiration of the Bush tax cuts and the massive spending cuts slated for 2013. "Those things could kill the economy and make Europe look healthy compared to the United States," he warned.

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About John Thomas Financial
John Thomas Financial, a member of FINRA and SIPC, is an independent broker-dealer and investment banking firm headquartered in New York City's Wall Street district. Emphasizing a client-centric approach to managing all aspects of its business, John Thomas Financial and its affiliates offer a full complement of retail brokerage, private wealth management, and corporate advisory services tailored to the unique needs of its clients. The firm publishes the Fiscal Liquidity Index a unique daily indicator that looks at government spending and its impact on the financial markets, as well as The John Thomas Financial Economic Outlook, a report analyzing consumer sentiment, market outlook, credit cycles and dozens of other market influences. For more information on the firm, please visit: www.johnthomasfinancial.com.

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