NY Times: Fears Intensify That Euro Crisis Could Snowball

[marmar]

Fears Intensify That Euro Crisis Could Snowball

By NELSON D. SCHWARTZ and ERIC DASH
Published: May 16, 2010


After a brief respite following the announcement last week of a nearly $1 trillion bailout plan for Europe, fear in the financial markets is building again, this time over worries that the Continent’s biggest banks face strains that will hobble European economies.

In a sign of the depth of the anxiety, the euro fell Friday to its lowest level since the depth of the financial crisis, as investors abandoned the currency as well as stocks in favor of gold and other assets seen as offering more safety.

In trading early Monday morning, the euro declined again, managing at one time to reach a four-year low relative to the dollar.

The president of the European Central Bank, Jean-Claude Trichet, in an interview published Saturday, warned that Europe was facing “severe tensions” and that the markets were fragile.

For Europe’s banks, the problems are twofold. Short-term borrowing costs are rising, which could lead institutions to cut back on new loans and call in old ones, crimping economic growth. ............(more)

The complete piece is at: http://www.nytimes.com/2010/05/17/business/global/17fear.html?partner=rss&emc=rss

[DonCoquixote]

1. Two lessons

One: Capitalism, even heavily diluted, regulated and civilized capitalism like the Euros practice, always has built in disasters.
Two: For those of us Yanks who sometimes wish we were more like the French and Swedes, the grass is not always greener.

[marmar]

2. No, but I'll take that socially safety-netted grass over ours.

nt

[DonCoquixote]

3. Nice Grass

Though the point was, there is a trend to worship the Euros and slam America as something without redeeming. There are things I would love to learn from them (like that safety net), but there are also things that I do not want transplanted over here (like their libel laws which can easily be twisted to choke speech.)

[Javaman]

4. I wonder who is next.

first iceland, then greece...

There are all sorts of rumors swirling on the net.

The latest one is the coming housing crash in china.

The next 5 years will prove to be more interesting than the last 5.