One hundred years ago in the run up to World War 1 the European powers had been dealing with continual diplomatic crises which were resolved with short regional wars or diplomatic solutions. As each event unfolded each country became a little more reluctant to compromise and the national governments started playing to the fears and prejudices of their respective populations. Eventually the world "sleepwalked" into an enormous war. As I look around the financial world and its recurring crises I can see similarities with 100 years ago. Every event creates a little hardening of the national positions (i.e. French comments in re Greece), countries try to use the crisis to enlarge their sphere of influence (i.e. Russia in Ukraine etc.), every country playing the martyr (i.e. Greek premier posturing for the local voters) and the rest of the world thinking no matter what the crisis will be avoided at the last minute. In 1914 when the world went over the edge most leaders of Europe were on vacation. Catastrophes can happen by accident and the European and Greek positions seems to be moving in the wrong direction.
On Bloomberg radio this morning there was a news item about China cutting the bank reserve requirement. The radio host said the GDP growth in China is around 7%. These two items taken together make no sense to me. Cutting reserve requirements for banks is a massive stimulus move and a clear indication that the central banking authority is worried about growth. If China's growth was an honest 7% I doubt there would be need for an extreme measure such as this. Beware of any economic statistics coming out of China.