Not just "an American problem".

[randomness]

Last week in the German parliament, finance minister Peer Steinbrück declared, "The financial crisis is above all an American problem."

Guess not.

Over the weekend, he was scrambling to organize a €50 billion rescue package to save Hypo Real Estate Holding AG, one of Germany's biggest housing lenders. To try to stop a bank panic, the German government also had to match the Greek and Irish governments and announce a national guarantee on all consumer bank deposits.

Maybe he should have waited a bit before indulging in schadenfreude.

Comments

[belfrynotes.livejournal.com]

I'm assuming you heard This American Life this weekend? I think they called it "Another Scary Show About the Economy," which it was. They focused on credit default swaps, and pointed the finger to those as what pushed Paulson over the edge to calling for the bailout.

[r-ness.livejournal.com]

I didn't! I should check that out.

Thanks!

[babasyzygy.livejournal.com]

I think we're well past the point where this is an emotional issue of mass psychology more than it is a mathematics issue. As people say whatever they can to fight the panic, they make silly claims - and then when those claims are revealed as silly, the panic cranks up another ratchet.

I expect that the next chance we'll have for a reversal is November, after Obama/Biden are elected (which is not a result that I necessarily am thrilled about, but at this point it's inevitable). I would not be surprised to see a big "new deal" kind of package, focusing on rebuilding US infrastructure and achieving energy independence - we're at the point where we need to understand as a society the difference between capital investment on credit and using credit for operations.

[r-ness.livejournal.com]

Steinbrück really went farther than he should have in his remarks, talking shit about the American and British banking model, when German banks were arguably in bigger trouble. (See http://paul.kedrosky.com/archives/2008/09/25/germany_the_tro.html for some snark on this.)

[meepodeekin.livejournal.com]

The idea of the German financial system collapsing makes me particularly upset, for racial memory reasons (particularly if they see fit to blame the crash on the US or their western neighbors).