Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
In reply to the discussion: STOCK MARKET WATCH -- Friday, 15 June 2012 [View all]xchrom
(108,903 posts)60. NIALL FERGUSON: 'If There's Going To Be A Lehman Moment In The Crisis, It's Going To Be Next Week'
http://www.businessinsider.com/the-financial-equivalent-of-the-cuban-missile-crisis-2012-6
Harvard professor Niall Ferguson told Bloomberg TV this morning that a Lehman moment could be nearing for the euro crisis as elections in Greece threaten to undermine European stability.
"If there's going to be a Lehman moment in the crisis it's going to be next week," he explained, saying that the back-and-forth between Athens and Berlin is "a game of chicken" that will not be resolved until the power structure in Greece has been decided.
He explained what will happen with another frightening analogy:
"It's not clear who's going to blink at this point. My guess is that, in the end, there will be a bit of blinking on both sides. This is the financial equivalent of the Cuban Missile Crisis. And the missile is really a bank run, which ultimately even the Germans can't be completely immune to. Not that there will ever be a run on German banks, but the effects of a bank run right across Southern Europe are going to be felt by the economy. German policymakers know that; they're just having to say one thing to their own voters and another thing privately to other European leaders."
While Ferguson waxed optimistic about the likelihood that Greece will stay in the euro and that EU leaders will find common ground after the Greek elections, he warned against putting too much faith in central banks.
Referring to the huge rally yesterday following rumors of coordinated central bank action, he said:
"In the end, the central banks can't do this on their own. And I think for the markets to assume that this can be fixed by yet another round of quantitative easing or whatever you want to call itLTROI think that's not realistic, because this is no longer just about liquidity. It's about the solvency of governments, the solvency of banks."
Read more: http://www.businessinsider.com/the-financial-equivalent-of-the-cuban-missile-crisis-2012-6#ixzz1xryzONwB
Harvard professor Niall Ferguson told Bloomberg TV this morning that a Lehman moment could be nearing for the euro crisis as elections in Greece threaten to undermine European stability.
"If there's going to be a Lehman moment in the crisis it's going to be next week," he explained, saying that the back-and-forth between Athens and Berlin is "a game of chicken" that will not be resolved until the power structure in Greece has been decided.
He explained what will happen with another frightening analogy:
"It's not clear who's going to blink at this point. My guess is that, in the end, there will be a bit of blinking on both sides. This is the financial equivalent of the Cuban Missile Crisis. And the missile is really a bank run, which ultimately even the Germans can't be completely immune to. Not that there will ever be a run on German banks, but the effects of a bank run right across Southern Europe are going to be felt by the economy. German policymakers know that; they're just having to say one thing to their own voters and another thing privately to other European leaders."
While Ferguson waxed optimistic about the likelihood that Greece will stay in the euro and that EU leaders will find common ground after the Greek elections, he warned against putting too much faith in central banks.
Referring to the huge rally yesterday following rumors of coordinated central bank action, he said:
"In the end, the central banks can't do this on their own. And I think for the markets to assume that this can be fixed by yet another round of quantitative easing or whatever you want to call itLTROI think that's not realistic, because this is no longer just about liquidity. It's about the solvency of governments, the solvency of banks."
Read more: http://www.businessinsider.com/the-financial-equivalent-of-the-cuban-missile-crisis-2012-6#ixzz1xryzONwB
Edit history
Please sign in to view edit histories.
79 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
U.S. government to use 'drones the size of GOLF BALLS to spy on AMERICAN citizens'
Demeter
Jun 2012
#18
BP Owes $192 Billion for Gulf Oil Disaster, Not $15 Billion Settlement It's Seeking
Demeter
Jun 2012
#8
Wells Fargo Takes Revenge on Blog for Posting How Bank’s Improper Foreclosure Led to a Suicide
Demeter
Jun 2012
#22
Serious Questions for Jamie Dimon in Occupy the SEC/Alternative Banking Senate Letter
Demeter
Jun 2012
#23