The markets are nervious. When the new Greek government revelead that the former government had been hiding debts and that the real debt burden of Greece is the double of what had been known, it was discovered that PIIGs were hiding in the woods. They are Europe's indebted countries, basically bankrupt, with bonds worth little to nothing. Should one go down, the markets would panic like with Lehman. Wechtel writes in Alpha:
True, conditions aren’t exactly the same. They are much worse.He advises USD hedges, gold and oil, and other hard assets. For the rest of 2010, the fear and uncertainty should continue to favor the US Dollar and other safe haven assets. TASE, Israel's STock EXchange, is a safe heaven for the intrepids.
The US economy is weaker, having shed around 10 million jobs since then. The Federal Reserve has already shot most of its bullets. In 2007, the Fed had yet to resort to its unprecedented stimulus package of special bank borrowing facilities, bailouts, takeover off bad assets, cut interest rates from 5.25% to 0.25% (from September ’07 until now), taken over AIG for $85 billion (September ’08, and later another $40 bln given), initiated TARP for $700 Billion, bought close to $2 trillion in assorted US Treasuries, agency mortgage backed securities and debt (March 2009-forward)