Chris Kuflik - ScotiaMcLeod Montreal

This month we have witnessed large declines in global equity markets as European contagion fears continue to mount. These declines caused most markets to decline below their 200-day moving averages. The question asked by many news media recently has been, “Is this the next Lehman style collapse?”

 Politicians in Germany and the U.S. are rushing to change capital market regulations this week. They are pandering to populist outcries against the bailouts of their financial institutions. Elected officials are looking for a quick and simple solution to quiet their people down; unfortunately most politicians do not understand how capital markets work. Their ignorance has been a disaster for global markets this past last week. Their political moves could lead to lower returns and higher costs for Canadians, even when markets improve.