There is some similarity between the euro crisis and the subprime crisis that caused the crash of 2008. In each case a supposedly riskless asset””collateralized debt obligations (CDOs), based largely on mortgages, in 2008, and European government bonds now””lost some or all of their value.
Unfortunately the euro crisis is more intractable….
In an ordinary financial crisis this tactic works: with the passage of time the panic subsides and confidence returns. But in this case time has been working against the authorities. Since the political will is missing, the problems continue to grow larger while the politics are also becoming more poisonous.
Read it all.
(NYRB) George Soros–Does the Euro Have a Future?
There is some similarity between the euro crisis and the subprime crisis that caused the crash of 2008. In each case a supposedly riskless asset””collateralized debt obligations (CDOs), based largely on mortgages, in 2008, and European government bonds now””lost some or all of their value.
Unfortunately the euro crisis is more intractable….
In an ordinary financial crisis this tactic works: with the passage of time the panic subsides and confidence returns. But in this case time has been working against the authorities. Since the political will is missing, the problems continue to grow larger while the politics are also becoming more poisonous.
Read it all.