You know you're in trouble when you get dissed by spectacularly ineffective U.S Treasury Secretary John Snow. But that's exactly what happened to the 25-country European Union last week.
Sounds like a buy signal to me. The news has been so bad for Europe in the last two weeks that I think this is a good time for contrarian U.S. investors to pick up a European equity or two.
Snow's lecture added insult to what has been, by anybody's count, an extremely tough three weeks for Europe. On May 29, the French soundly rejected a new constitution for the European Union. Days later, Dutch voters followed suit.
The euro, which has been weak against the dollar, kept on falling on that news, hitting a nine-month low at $1.2018 on June 15. Governments in France, Italy and Germany teetered, and pundits now expect Germany's Gerhard Schroeder to go down to defeat this fall.
On June 17, the European Central Bank added fuel to the euro fire when Vice President Lucas Papademos worried that diverging economic performance inside the eurozone was a threat to the monetary union.
And the sight of Europe's leaders squabbling amongst themselves at the European Union's budget summit in Brussels, with no budget agreement emerging from the meeting, has rattled nerves further. (For more detail on turmoil in the eurozone, see my recent column "
Thank Europe for a Stronger Dollar
But all this hasn't kept Europe's stock markets from hitting new highs. In fact, all this seeming chaos may actually be fueling the advance.
A weaker euro, for a start, means that the products of eurozone companies sell for less in dollars. That's a big boost to exports for export-driven economies, such as Germany's.