Are the Germans Going to Crash the World Economy?

As Greece squeezes by without a “Grexit” — earlier this week eurozone ministers approved a four-month bailout extension— markets, politicians, pundits are far calmer today than they were a few years ago. Back then, in the fall of 2011, the prospect of a eurozone without Greece sent global markets into turmoil. Granted, it was bad year, what with a near-U.S. debt default and pervasive fears of a European Monetary Union undone by mountains of bad bank debt. By late November 2011, international credit markets were exhibiting the same danger signs of stress that followed the collapse of Lehman Brothers in September 2008, and it appeared that the long-feared next stage of a global financial implosion was at hand. It took the simultaneously actions of the world’s central banks, followed by a “final” bailout of Greece by the “troika” of the IMF, the European Central Bank and the Eurozone countries to the tune of 240 billion Euros.

Read More

The Upside of a 'De-Americanized' World

This current bout of Washington absurdity has reached its denouement, for now. Though resolved for the next few weeks, these debates seem certain to continue, especially with the debt compromise only good until February. Overall, the result has been to accelerate a trend that has been gathering steam for at least the last five years: the move away from a Washington-centric world and towards a new, undefined, but decidedly less American global system.

Read More

Markets’ Mood Swings Show Volatility, Don’t Signal Financial Armageddon

Once more into the breach we go. After a strong week where markets regained some footing, Monday once again saw a sharp selloff of nearly 2 percent. These wildly volatile days have been the norm since mid-summer, and as any market maven will attest, such volatility usually means that there is more to come.

Read More

Germany’s Risky Eurozone Bailout a Positive Step in Right Direction

The German government voted in favor of a European bailout fund designed to aid Greece tentatively set at $600 billion. That rivals in size the bailouts the United States passed at the urging of then-Treasury Secretary Henry Paulson in the fall of 2008 and again in February 2009, which prevented a complete implosion of the financial system whose consequences would have made the resulting recession and market plunge look inconsequential by comparison. 

Read More