Re: NP - Eurodoom Continues Apace—Is America Next?

[Rich]

There was a report today about the increased health of American banks. As your link implies its just that opacity in determining the true state of global banks which remains. Those toxic assets are somewheres still. Despite the crash in 2008 there still appears to be a lot of denial out there and modern governments who we rely on to temper the madness are either colluding, ignorant, or oblivious.  Most likely just stupid. And u knew that would be the trojan horse after all

Sent from my iPhone

On May 25, 2012, at 4:28 PM, David Morris <fqmorris at gmail.com> wrote:

> http://www.washingtonmonthly.com/political-animal-a/2012_05/eurodoom_continues_apaceis_ame037566.php
> 
> The natural question for Americans would be how much we would be hurt
> if the Eurozone suffered a disorderly breakup (and, let’s be clear, it
> would be extraordinarily bad at least within the European periphery,
> as a bunch of the world’s largest economies watched their banking
> sectors collapse at the same time). According to Paul Krugman, US
> exports to the Eurozone only total about 2 percent of GDP, and since
> imports wouldn’t utterly cease even in the worst case, that mechanical
> effect of reduced foreign purchases of our goods and services wouldn’t
> be catastrophic.
> 
> But as Krugman notes, the real danger is through the financial
> channel. Modern banks are huge and heavily interconnected across
> countries, and some are thoroughly rotten. Bank failures across Europe
> could potentially trigger a Lehman-like financial shock in the US. One
> would think, given how long everyone has been watching the Euro
> problem, that banks would have figured out ways to protect themselves,
> but JPMorgan’s recent monster loss and MF Global’s bankruptcy (which
> killed itself gambling on European debt, remember) have thoroughly
> undermined my confidence.