Tonight’s question, greetings, and social banter here. (More)
| Tonight’s Campus Question |
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McClatchy reports European credit markets sinking after German Economic Minister Philipp Rösler said Greece may require an “orderly default” on her bonds. Greece had invested heavily in U.S. mortgage-backed securities, and the 2008 crash created her debt crisis. Harvard University economist Kenneth Rogoff told McClatchy that European markets may have to reach a “breaking point” before governments will act. Is political paralysis becoming the new normal in governments worldwide? |
Today on Campus
Morning Feature – Winning Progressive with How the Media Propogate Non-troversies
Furthermore! – The BPI Squirrel with The ‘Pro-Life’ Party
Evening Focus – addisanana with She Who Will Not Be Tamed: Wildfire
Our Earth – winterbanyan with Green Climate Fund
The German government’s reluctance to offer more financial support to Greece bears some resemblance to the U.S. government’s reluctance to support Lehman Brothers going into the 2008 crash. In each case, immediate problem is less worrisome than the similar – and much larger – problems looming on the horizon. Toxic-asset-choked Lehman Brothers was a Big Problem, but AIG and the other toxic-asset-choked banks were Huge Problems. Toxic-asset-choked Greece is a Big Problem, but toxic-asset-choked Spain and Portugal have much larger economies and will be Huge Problems. Germany is the most prosperous and fiscally sound economy in the European Union, and they don’t want to be on the hook for all of Europe’s toxic-asset-created debt.
And this is a spinoff of the U.S. mortgage derivative meltdown. Greece, Spain, and Portugal had sound economies with full employment and low debt, until they were lured into major investments in mortgage derivatives that were rated AAA but were actually junk bonds. When those derivatives crashed, they took huge chunks out of the Greek, Spanish, and Portuguese balance sheets. That – not extravagant public spending – is why they now face unrepayable debts.
But no matter how they got to where they are, they are still there. I fear Dr. Rogoff is correct: the political will to step in and help them resolve their debt will require a “breaking point” on the order of 2008.
yet we’re told over and over again how these “failed” states exemplify why Socialism is BAD.
Seems to me it was the Capitalists that blew it…
Angela Merkel the German Chancellor was on the radio today trying to calm things down.
I heard today on the radio (cannot find the link) that Merkel had told her ministers to stop talking about default as it wasn’t helping.
Since the Greek debt problem was largely caused by their investment in US mortgage securities I am wondering why Greece isn’t suing Wall Street or whoever issued them the worthless paper. Hmmm.
We’re still suing everyone over these securities. We’re evening suing Germany’s major bank over the amount of bad paper they sold to us. Everyone else might as well get on the bandwagon, too. Lives have been destroyed, communities have become bankrupt, and all to make a handful wealthier.
Then we had to bail them out. Everyone is still flailing trying to find a way to deal with “the money that never was.”
I suggest the banks and investment firms eat it, while being obliged to protect depositors.
Saving the eurozone is a high priority. As important to the stability of the world as our own solvency.
Social Banter Department: I e-mailed Congressman Shimkus asking him to support the President’s jobs bill. All I got back was Republican dreck and GOP talking points. Kinda figured that, I think I’ll leave him a phone message tomorrow…….. Sheesh!
Good for you for emailing your Congressman!
You’re lucky to have gotten that. I wrote my Texas GOP critters and all I got back was the automated thank yous. I did point out to all who did not have Jobs/Employment/Unemployment on their dropdown lists that it just points out how out of touch they all are.
So, unfortunately, my Representative MN 06 is Bachmann. I will say that since she has started running for President, her automated email replies have become glossier and slicker. I am saving them all in a file entitled ‘the evolution of a candidate’. Is that not ironic?
wow…. really?
I’m occasionally a fan of the “nationalize the crooks” response that some countries seem to be able to pull off. Too bad that’s such a no-no here. I can think of at least three banks that really don’t deserve to carry on. And their assets on the books roughly equal our national debt.
Hmmm…..