Although the stock market has just closed its third positive session over good European news, the BBC is reporting what is seen as the inevitable truth. If the EU does not address their financial crisis, large European banks will start to fail within a few weeks. Let’s hope that the Fed will not redistribute more money to Europe and draw us into a faster collapse.
httpv://www.youtube.com/watch?v=6UGDTtqklSo
So the big questions are the amount of credit default swaps and the exposure of the Spanish and Italian banks. Looks like Greece has already been written off.
David DeGerolamo
In The Absence Of A Credible Plan We Will Have A Global Financial Meltdown In Two To Three Weeks
A week after the BBC exploded Alessio Rastani to the stage, it has just done it all over again. In an interview with IMF advisor Robert Shapiro, the bailout expert has pretty much said what, once again, is on everyone’s mind: “If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system. We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world. This would be a crisis that would be in my view more serious than the crisis in 2008…. What we don’t know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems.”
