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Does history repeat itself? It does not seem so.

Published Thursday, June 19th, 2014

When the Argentine economic depression started in the third quarter of 1998 the DJIA index crashed 12%. The government of the Latin American country warned yesterday that it will not be able to pay back its debts due on June 3. In other words, they might default. One would imagine that the news will send shivers down the spines of investors. It could not be further from reality as the DJIA gained 0.58% on the day, the S&P 500 index settled at yet another all-time high yesterday and the MSCI Global Equity index is also exploring uncharted territories this morning.

This optimism is due to the persistent belief that the global, and within that the US economy, is in a good shape. A supposed confirmation of this came yesterday from the Fed. The US central bank rushed to calm the nerves of the market by saying that low interest rates would stay with us in the foreseeable future. The Fed also sees the US economy expanding solidly as it left the 2015 and 2016 growth forecast unchanged, although revised this year’s growth estimate slightly down.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.