Posted on 11/26/2011 9:58:19 PM PST by DeaconBenjamin
For the growing chorus of observers who fear that a breakup of the euro zone might be at hand, Chancellor Angela Merkel of Germany has a pointed rebuke: Its never going to happen.
But some banks are no longer so sure, especially as the sovereign debt crisis threatened to ensnare Germany itself this week, when investors began to question the nations stature as Europes main pillar of stability.
On Friday, Standard & Poors downgraded Belgiums credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week cautioned that France could lose its AAA rating if the crisis grew. On Thursday, agencies lowered the ratings of Portugal and Hungary to junk.
While European leaders still say there is no need to draw up a Plan B, some of the worlds biggest banks, and their supervisors, are doing just that.
We cannot be, and are not, complacent on this front, Andrew Bailey, a regulator at Britains Financial Services Authority, said this week. We must not ignore the prospect of a disorderly departure of some countries from the euro zone, he said.
Banks including Merrill Lynch, Barclays Capital and Nomura issued a cascade of reports this week examining the likelihood of a breakup of the euro zone. The euro zone financial crisis has entered a far more dangerous phase, analysts at Nomura wrote on Friday. Unless the European Central Bank steps in to help where politicians have failed, a euro breakup now appears probable rather than possible, the bank said.
(Excerpt) Read more at nytimes.com ...
The Euro can’t coexist with redistribution, and the less prosperous members of the EU were less prosperous precisely because of their level of socialism.
Thanks DeaconBenjamin.
Thanks, that’ll make a great quote for this week’s GGG digest.
Believe it or not, Otto Von was quite a wit, and has other quotable quotes.
It’s perfect for the official denail by Angela M.
Your guess is as good as mine! We’re just a couple of ants, trying to predict the behaviour of elephant herds on the horizon.
Given the news over the past week or two, I had suspected a more pronounced drop, but it’s not evident. Either the smart money doesn’t buy the media panic which makes it hype for some other purpose, or it’s not supported by private funds which makes it propped up by some other entity.
I can’t wait for each new day, to watch history unfold.
I’ve had a lurking, sick feeling that every milestone, birthday, family event and holiday needs to be celebrated as if it were the last we’ll be able to celebrate for a long time, for going on four years.
I’m either getting “the boy who cried wolf” syndrome or have just become acclimated to living in a depression, and the looming collapse of yet another institution or country is starting to seem normal.
Dangerous, I know. If you had asked me in 2008 if I’d be battling complacency on the eve of 2012 given all that has transpired since, I’d have thought you were crazy.
I keep telling my family, especially after every nice meal, “these ARE the good old days.”
We had some beautiful fresh codfish tonight, fillets 2” thick, melt in your mouth. That fish probably came from an ocean a long, long way away, and passed through a lot of brokers along the way to my plate.
I wonder how long we average Americans shall be able to enjoy such a luxurious (by world historical measures) standard of living?
Hope for the best, prepare for the worst. These ARE the good old days.
I’ve gained a much keener appreciation for all the fine foods we have at our dsiposal, and marvel at how many nations, how much transit, how many hands are involved in keeping us so well fed, yes.
Can’t help but wonder at the seeming vulnerability of it all, to the point that I’m actually comforted and even moved by the sight of local farming on any scale. I want to be where the farms are, it’s such a relief to return when I’ve been traveling to large urban areas.
Maybe it’s due to fondness for my upbringing in a semirural agricultural area welling up as a result of the constant lowgrade stress, but it’s sort of primal, too. No big cities, be close to the land.
Didn’t always feel this way, not at all.
I hope.
Old families in the country here aren’t that far removed from having to scratch their sustenance out of the ground under hardship. Great Depression, Civil War, Revolutionary War and frontier settlement before that. Never more than a generation or two removed before it comes back. It may turn out to have been a blessing in disguise.
Those of us who have them need to approach our older kin who have experienced such a time to learn from them before they pass, if we haven’t already. They can teach you some very important things.
In an unintended consequence, this could end up propping up the US economy, of all things! And it could tempt companies like Goldman Sachs to look at buying European assets at fire sale prices, if they don't beat the Chinese to it first!
It’ll fire up the authoritarian right and the totalitarian left in various European countries, who will unite to blame the United States. Not that they don’t already, and not that they’re altogether wrong, but it will ramp up to a new and dangerous level, more like sabre-rattling as they gain control of various governments, imho. Center-right coalitions and US-friendly governments as a whole will fall and be replaced by something decidedly less friendly.
I’ve been saying the same thing to my wife for the past year. It feels like we are in 1938/39.
I’ve been sort of mentally tracking our not-a-depression with the Great Depression myself. I figure we’re on the eve of 1933, myself. Worst year of it overall, as far as unemployment and bank failures. Of course, it was regionalized even then, with some areas faring far worse and some far better. For instance, it didn’t hit the fan here until 1934. Conditions varied across the country then just as they do now.
I was thinking not so much in economic terms as in being on the precipice of a world-transforming event. I do not anticipate significant improvement in the US economy in the near future.
With elements of 1860, 1914, etc.
How’s your boat these days?
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