Paul Krugman Blog- The Mark-To-Market Amplification Of Financial Distress

[n2doc]

A nice phrase from my colleague Hyun Song Shin (pdf), describing what’s happening in Europe right now.

The paper covers much more ground than that, of course. This is the latest in a series of papers arguing that the U.S. shadow banking system consists in large part of … European banks. This suggests that the creation of the euro had large implications even in US capital markets; and of course it suggests that the financial fallout of the euromess could be very large here as well.

In short, the ECB could be in the process of destroying not just the euro, but the world.

http://krugman.blogs.nytimes.com/2011/11/20/the-mark-to-market-amplification-of-financial-distress/

[banned from Kos]

1. The US banks are damned safe compared to the Euro banks

huge capital cushions here.

[PufPuf23]

2. You must not had read Krugman's blog or the article he references

Specifically, if the EU goes down so does the USA because of shadow banking and the inter-connects of our banks.

There is a screaming need for more regulations and transparency in private and central banking systems.