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Old 11-21-2011, 10:37 AM
ledocs ledocs is offline
Join Date: Sep 2007
Location: France, Earth
Posts: 1,165
Default Re: Worldwise: German Sentiment (Karl Smith & Arash Molavi Vassei)

Impossible to glean very much from this, due to the technical problems.

Here is an interview with a Greek economist who has been talking to Doug Henwood periodically about the financial crisis. This is actually the best discussion I have heard so far about the euro crisis (it is the episode of November 12, 2011).

The problem, as I understand it, is that given current institutional structures, i.e. currency union without political/fiscal union, the markets will always attack the bonds of the weaker and/or weakest links in the union. But then this creates a problem for the entire union, especially when the weak link is a major country, let's say Italy.

Just as was the case in the US financial crisis, I would like to hear someone spell out how derivatives may be contributing to the euro crisis, which would mean getting an estimate of who holds them, in what amounts, and what the net position of major banks with lots of sovereign debt exposure is. That is, one line of argument is that the crisis is less one of sovereign European governments than of private European banks who are their creditors. But I have heard Matt Miller say on "Left, Right, and Center" that an aggravating problem is the domino effect that might ensue in the derivative market for the sovereign debt instruments. He is getting that from sources, he's not making it up or thinking it up on his own, and he did work at OMB under Clinton.

Last edited by ledocs; 11-21-2011 at 10:42 AM..
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