I am starting to see more and more articles in the Europen papers about the plans that the finance and government sectors have ready if (when) the Euro collapses. There have been more and more of these over the past week. Today the top two articles are from Der Spiegel and from the London Telegraph.
The Der Spiegel article is quite long and can be read at your leisure here. It will be worth your time.
The London Telegraph article can be read here.
The increasing frequency of this topic in the last week or so leads me to believe that something bad is headed our way.
Oh, and Moody’s downgraded most of the Spanish banking system…they are 3 months away from junk status.
The Greek Finance Minister resigned before he could be sworn in.
Moody’s Investors Service cut its long-term credit rating on Banco Popular Espanol SA to junk status as part of a broader downgrade of Spanish banks Monday.
Moody’s says the bank is vulnerable to losses from Spain’s real estate downturn, while the government’s weakening finances makes it more difficult to support the banks. Moody’s downgraded 28 Spanish banks Monday.
The ratings firm cut Banco Popular’s long-term credit rating four notches, into junk territory, at “Ba1″ from “A3.” Moody’s ratings for Banco Popular remain under review for a possible downgrade.
A downgrade typically means that banks will have to pay more for their debt. Investors demand higher interest for riskier debt, which is what the cuts represent.
Moody’s said its broad downgrades of the Spanish banks stemmed from its lowering of Spain’s credit rating by three notches earlier this month.
The action followed a move by Spain’s government earlier on Monday to formally ask for help from its European neighbors in cleaning up its stricken banking sector. But it isn’t yet known how much of a $125 billion loan package Spain will request, and the uncertainty weighed on markets in the U.S. and Europe Monday.
The Spanish economy, the fourth-largest of the 17 countries that use the euro currency, is suffering from the aftershocks of a real estate bust that has devastated families as well as banks. Unemployment is nearly 25 percent.
Seems as though the EU -- AND many of its component governments -- need to have a going out of business sale.
If, or when, they have one in the US, I’ll probably be press-ganged into service as one of the many cashiers…