Demonstrators crowd around the euro logo in front of the European Central Bank (ECB) as they take part in a protest march as part of the 'Occupy Frankfurt' movement in Frankfurt am Main, on October 29, 2011. Photo by DANIEL ROLAND/AFP/Getty Images
Should The Fed Save Europe From Disaster? -- Ambrose Evans-Pritchard, The Telegraph
The dam is breaking in Europe. Interbank lending has seized up. Much of the financial system is paralysed, setting off a credit crunch just as Euroland slides back into slump.
The Euribor/OIS spread or`fear gauge’ is flashing red warning signals. Dollar funding costs in Europe have spiked to Lehman-crisis levels, leaving lenders struggling frantically to cover their $2 trillion (£1.3 trillion) funding gap.
America’s money markets are no longer willing to lend to over-leveraged Euroland banks, or only on drastically short maturities below seven days. Exposure to French banks has been slashed by 69pc since May.
Italy faces a “sudden stop” in funding, forced to pay 6.5pc on Friday for six-month money, despite the technocrat take-over in Rome.
Read more ....
My Comment: Even if the political will existed in Washington to help the Euro .... which there is none .... the sad fact is that the U.S. is itself broke and facing it's own debt nightmare.But something has to be done .... or the worse scenario will ultimately happen.
No comments:
Post a Comment