Europe Tries to Stave Off a Reckoning

[Gerald]

BRUSSELS — Many around the world are worried that Europe is about to face a Lehman Brothers moment, a big bankruptcy or sudden default that sets off a new phase of panic in Europe and beyond.But these days the problem for Europe may be that it has not had — and may not have — its own Lehman Brothers, at least in the sense that Lehman shocked Americans to take divisive and expensive steps to repair the damage. Instead, it has seen a slow-motion leak of confidence and a steady drain on credibility that has extracted a large and growing toll on stock and bond prices and on the livelihoods of its citizens. Nearly two years after the euro crisis began with concerns about the solvency of Greece, fears have spread to big banks and large countries like Spain and Italy and squashed the gradual recovery from the 2008 recession. But Europe still has not had the all-hands emergency response the Bush administration and the United States Federal Reserve were forced to undertake after the collapse of Lehman on Sept. 15, 2008, and it is unclear if even the intensified market turmoil now is enough to prompt one. An uncontrolled Greek default or a run on a major European bank could still overturn expectations and compel France, Germany and the European Central Bank to act with much greater urgency. But for now, political and financial leaders are buying time, putting out fires one by one, like propping up Dexia Bank, and making vague promises, as European officials did Wednesday, about scheduling new meetings to discuss the recapitalization of European banks.

http://www.nytimes.com/2011/10/06/world/europe/europe-tries-to-stave-off-a-reckoning.html?_r=1&ref=todayspaper


Note: October 5, 2011

[kraznyi_oktjabr]

In my opinion its true that our leaders refuse to see reality - at least in public. From article I got impression that writer thinks US style bail-out-everyone as best solution. If writer meant that then I strongly disagree.

[Oberon]

Well...one thing is certain, it's drier than Death valley out there...and there's lightning in the air...it's just gonna take one spark.

[MothBalls]

Just set everything to zero and reboot.

Zero out every credit card, every promissory note, nobody owes anybody anything and we all start new, next week (after I go buy a ton of crap on credit first).

[Jimbuna]

LOL...my sentiments entirely :DL

[Skybird]

There is a volcano to erupt in Europe - but the American recipe is not the way to adress it. The Americans are more about boosting there own miserable situation by trying to make the Eurppeans comply with their needs.

The safeties of banks - financial savings - have been improved after 2008, but the porblem is that the new challenges and problems increased by a much greater factor, that'S why the situation now is even more intimidating and dangerous, and the damage will be greater than in 2008.

I think we now must make it right through the centre of the storm, we have run out of options on how to avoid it. Hunker down, hope you personally are sufficiently prepared, and pray. Honestly said, I do not know if my attenmpts to prepare for my future and higher age will survive, and if I will make it after the storm has passed. Could be that it kills more of my ressources than I can compensate. Politicians will try to delay the meltdown a bit more, which in the end will just increase the mess raining down on us once the dam has broken.

But one thing I am sure of: making even more debts and creating even more stimulus packages and trying to revitalise the suicidal illusions that have brought us to this pass, will not help us. Not one bit. Also,m our children will learn to really hate us if we just contiunue to consume their future chances. We have stolen from them already far too much by our endless making of debts and more debts.

If I were a baby getting newly born in our nations these days, i would curse you all for the monumental crime you have committed against my generation.

[kraznyi_oktjabr]

In tuesday in finnish economy related newspaper was article which provided estimate of direct and indirect responsibilities incurred so far from these "rescue packages". Grand total at the moment is around €30 billion which happens to be about same as total damage (new gov debt + GDP loss) caused to Finland by 2008 crisis.

Link to article (in finnish) (http://www.taloussanomat.fi/kansantalous/2011/10/05/yllatys-suomen-piikissa-jo-30-miljardin-kriisivastuut/201114170/12?ref=tf1)

[Skybird]

In tuesday in finnish economy related newspaper was article which provided estimate of direct and indirect responsibilities incurred so far from these "rescue packages". Grand total at the moment is around ***8364;30 billion which happens to be about same as total damage (new gov debt + GDP loss) caused to Finland by 2008 crisis.

Link to article (in finnish) (http://www.taloussanomat.fi/kansantalous/2011/10/05/yllatys-suomen-piikissa-jo-30-miljardin-kriisivastuut/201114170/12?ref=tf1)

Oh happy Finland. The latest packlage the German Bundestag has willed just days ago, is officially some 200+ billion, but if calculating interests and indirect costs for it as well, it is around 480 billion, and some independent sources calculate it to be beyond 600 billion. Now calculate the costs for raising interests for Germany when it gets downrated by Moody or S&P and must pay more to get credit.

Mind you - just this one bailout fond, not all costs for all the crisis together. These would be rated in the range of trillions.

Brussel already wants this fond being leveraged. This means that Germany's risk would multiply, and the costs once the bubble burst also will multiply those mentioned 600 billion. And it will burst, becasue it is no substantial solution of root problems, but an empty bubble only.

I think they simply do not actually know what those numbers mean they are throwing around with.

[Skybird]

This visualisation was meant to illustrate the US public debts, but I find it very useful for giving a visual feedback on how much those enormous sums of money actually are they always talk about in the media, so that people maybe can imagine what that really is: one trillion and one hundred trillion.

http://usdebt.kleptocracy.us/ (http://usdebt.kleptocracy.us/)

[Rockstar]

There is a volcano to erupt in Europe - but the American recipe is not the way to adress it.American way? Not anymore man.

Give thanks to the U.N. it's everyones dream come true. Working together to stave off the global crisis. We don't need some country like Germany to start acting independently of the UN and the IMF. Ante up and pay your fair share because you too are a member of the IMF! :woot: