Yes, it’s a global event, which is one reason why the dollar is likely to surprise on the upside. As bad as our situation is it is worse elsewhere. Our pals who insist on viewing this crisis as originating in Democrat vs Republican politics apparently don’t appreciate just how widespread the problem is.
On that, we’re in vehement agreement. Absolutely.
Here’s a delicious bit of dark humor from those days. Did you pay any attention during those days to the harrumphing of the German Minister of Finance, Steinbrueck? Here’s a wee sample of his pecksniffing:
http://www.forbes.com/feeds/afx/2008/09/25/afx5468765.html
Flash-forward a couple of weeks into October 2009. Hypo Real Estate Bank... the German President Merkel comes out of a meeting in Paris on the subject of a co-ordinated EU response to their banking issues, and within two hours blows all talk of co-ordination out of the water as she has to backstop Hypo - lest it go down in flames with depositors’ monies, because there was no deposit insurance.
Ah, it was delicious irony reading the pecksniffery of the German MoF one week, only to see him walking in lock-step only two weeks later. Since I can read German, it was very telling to see how the Germans handled it in their domestic press vs. how the Germans put up a front for the “Anglo-American” business press. Internally, the Germans were mortified to find out that their banks were levered up even higher and thinner than US banks. The numbers were just smaller in absolute amount, that’s all.