The fear has hit europe in the crash and rolling crash of Mortgages and more important, of mortgage backed securities. This could be the big crash.
For example, Handelsblatt, Germany's leading business daily, noted that because a standard mortgage firm defaulted now, not a firm of the sub-prime scene, a spill-over to the rest of the market is feared, and "a profound economic crisis in the USA could result from that." The same article quotes a German market analyst as saying "the financial markets fear that unlike the crisis of the hedge fund LTCM, this time it is not one big bomb that causes damage, but that behind every door, there is a hand grenade (ready to go off)."
Also, Liberation, one of France's leading news dailies, pointed out that the American Home Mortgage case signals what the IKB collapse in Germany already indicated, namely that the crisis has turned systemic. And since one third of jobs created in the USA since 2001 hang on the real estate market, the crisis will hit badly in the States, but not only there, due to this globalized, highly-interconnected world.
Berlingske Tidende, a leading Danish news daily, added some sarcastic notes to its report on the American Home Mortgage disaster, saying that the "fin-spins," the financial market spin-doctors, still create the impression that nobody here on Earth has to worry, as if the losses will be taken by someone from outer space, in case of a crash.
A crisis symptom of the first degree in Europe was furthermore, that the Governor of the European Central Bank, Jean-Claude Trichet, broke the taboo that no press briefings be held in the holiday month of August, when he went to the press yesterday, trying to deliver the message that "calm blood" allegedly was appropriate in this crisis, that things were under control.
Friday, August 3
Europeans Fear Global Financial Crash
Posted by Howiecopywriter at 6:24 PM
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