It’s the same problem that we have, overleverage. “Innovations” in finance that supposedly reduced risk, but did no such thing, credit bubble, real estate bubble, etcetera. It appears that Europe, at least, went further into financial lala land than we did. I’ve seen estimates ranging from US$16 trillion to US$27 trillion for EU problems alone. Makes Obama look like a piker, but then he’s just getting started.
From your comments, it sounds like a lot of people in charge were clueless and didn’t stick with what works. I can remember when Rubin was using the Federal Thrift Savings money to prop up the market so it wouldn’t correct under Clinton so he could have everything on the rise. I was appalled but it sounds like it is even worse with the “innovations” in finance. Stupid people, media, and voters who buy into all of this and give us people with no experience like ZERO.
Cannot even fathom $16T to $27T in US dollars. What were they smoking?