The Debt Demon Lurks—It’s Still Out There Waiting to Strike

The stock market is very much in consolidation mode, and it’s still highly vulnerable to all the risks out there. The sovereign debt crisis isn’t over; the eurozone has just backstopped sovereign debt with additional debt. And while the U.S. housing market is showing signs of improvement, this really isn’t a surprise. Enough years have elapsed that home sales and prices should be improving. Risk is very high in this stock market, and prices may soon become expensive relative to earnings. You can’t really say that the stock market isn’t holding up well. Large-cap technology stocks have taken a hit, but this group has been one of the strongest performers since the 2009 low. Intel Corporation (NASDAQ/INTC) has really been hit hard, now trading below $20.00 a share. This company illustrates the problems faced by many international businesses. You can’t grow your earnings if there...