The Europeans seem to have woken up to the fact that their banks have
1. plenty of bad US mortgage securities on the books
2. worse accounting and transparency than US banks
3. their own housing bubbles to deal with in the UK, Spain, ...
and that their governments are even further behind the curve than ours.
Markets are down everywhere and people close to the action are ranting about the apocalypse.
To make us all feel better, here's a graph of long run US economic growth (via Tyler Cowen).
Great Blog, but the old format was alot better. Why the change? Liked having the links on the right side...
ReplyDeleteThis sounds really bad! A likely story in a third-world country (like Pakistan that has almost no forex now), not a first-world nation...
ReplyDeleteFrom The party's over for Iceland, the island that tried to buy the world.
Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.
People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.
MFA