Sun Jun 24, 2012, 08:19 PM
marmar (69,383 posts)
Simon Johnson: U.S. Banks Arenít Nearly Ready for Coming European Crisis
(Bloomberg) The euro area faces a major economic crisis, most likely a series of rolling, country-specific problems involving some combination of failing banks and sovereigns that canít pay their debts in full.
This will culminate in systemwide stress, emergency liquidity loans from the European Central Bank and politicians from all the countries involved increasingly at one anotherís throats.
Even the optimists now say openly that Europe will only solve its problems when the alternatives look sufficiently bleak and time has run out. Less optimistic people increasingly think that the euro area will break up because all the proposed solutions are pie-in-the-sky. If the latter view is right -- or even if concern about dissolution grows in coming months -- markets, investors, regulators and governments need to worry not just about interest-rate risk and credit risk, but also dissolution risk.
Whatís more, they also need to worry a great deal about what the repricing of risk will do to the worldís thinly capitalized and highly leveraged megabanks. Officials, unfortunately, appear not to have thought about this at all; the Group of 20 meeting and communique last week exuded complacency and neglect. ....................(more)
The complete piece is at: http://www.bloomberg.com/news/2012-06-24/u-s-banks-aren-t-nearly-ready-for-coming-european-crisis.html
11 replies, 1786 views
Simon Johnson: U.S. Banks Arenít Nearly Ready for Coming European Crisis (Original post)
|Prometheus Bound||Jun 2012||#8|
|Prometheus Bound||Jun 2012||#11|
Response to AnotherMcIntosh (Reply #1)
Sun Jun 24, 2012, 08:58 PM
freshwest (53,648 posts)
2. We had a thread yesterday saying Bernanke was bailing them out with Federal Reserve funds.
Bernanke bails out Europe
Is this article an announcement that we will have to make another bailout if they don't make good on that transaction with us?
I feel there's a lot of fear mongering by those who selling solutions for profit, that aren't going to change what is a systematic problem. I'm trying to not worry, just being careful personally.
Obama kept saying something about September a few months ago in a budget disagreement. It seems a lot of these big payments the article is talking about hit in certain quarters.
If you got anything for me here, help. There is the China news coming out, too, and I'm not that great on any of this. TIA.
Response to marmar (Original post)
Mon Jun 25, 2012, 03:04 AM
Prometheus Bound (3,489 posts)
8. "The COMING European crisis." Har Har, that's a good one.
I'd say they're right smack in the middle of a crisis.