Ian Hamilton

This column is authored by Ian Hamilton, who is the founder of IDS Group. IDS provides fund administration services in Africa and Europe through Malta. He is also the founder of Scotstone Investments, a company that has fund structures and services for global emerging new managers.

Greece volcanos and Chinese firecrackers dominate the international financial news.

Greece's issues have been "resolved" by a whole new loan schedule and more cash flowing in to the bottomless pit. But like a volcano, it will only be dormant for a while and then we will see another Euro crisis.

Nea Kameni is a Greek volcanic island formed in 1950 in the flooded Santorini cauldron. The Santorini cauldron was originally created by a massive volcanic explosion estimated to have taken place in the mid-second millennium BC and destroyed the nearby Minoan civilization.

Will history repeat itself in a couple of years' time with a fourth blow up in Greece which will destroy the Euro and EU?

The Chinese fire cracker has shades of 1927. The cause is simple; the Chinese authorities were worried about the extent of leverage in most Chinese companies. The Chinese solution was to list many companies and replace debt with equity.

At the same time consumer borrowing became easy and cheap. So the proverbial woman with the perambulator* (or the Chinese equivalent) thought that borrowing to invest in the booming stock market was a safe bet. This simply moved the leverage from company balance sheets to unsophisticated investors.

Unsophisticated investors always tend to come in at the end of a market's economic cycle. They are weak holders and easily ......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.