As America's economy comes up for air, Europe prepares to plumb the depths

Last week, we wrote that investors were becoming more interested in the US despite the worsening economy, threat of rising interest rates and a weakening dollar. Europe is almost the mirror image; its major economies, Germany in particular, are relatively robust; its currency has risen sharply against both the dollar and the pound and is expected to continue to do so; its consumers have, for the most part, avoided the debt finance binge America and Britain have indulged in; and, outside Spain and Ireland, the housing market is not on the brink of collapse. Yet, while investors think America could be getting over the worst of its downturn, they fear Europe is only just beginning. Feras al-Chalabi, manager of the CF Odey Continental Europe fund, thinks that the 8 per cent or so growth forecasts by analysts for this year will... [read full story]