Coming Soon: The Tea Party Recession of 2011?
Kevin Drum, Mother Jones Full Story Back in 2008, during the worst of the financial crisis, I remember that many of us were shaking our heads a bit over Europe. American banks were clearly overleveraged, which led to the collapse of Bear Stearns and Lehman and Wachovia, and the near collapse of several others, but European banks mostly came through unscathed. Outside of Great Britain (and Iceland, of course), Europe suffered only a few bank failures, and they were pretty easily contained. And yet, European banks, on average, were more highly leveraged than ours. Shouldn’t they have collapsed even worse than ours? What gives?
Well, now we know: European banks were in worse shape than ours, but they were overleveraged in a different way that allowed them to hang on a couple of years longer. But now the jig is about up. Greece is about ready to fail, and after that, maybe Spain and Italy too. Ezra Klein talks to Desmond Lachman about what this means. >>
Published 11.09.28 08:54:40 -0500 GMT
Posted by Andrew Garib on 11.09.28 
Created: 05.12.04 