Uh oh.
NYTimes:
When the White House brought out its $700 billion rescue plan two weeks ago, its sheer size was meant to soothe the global financial system, restoring trust and confidence. Three days after the plan was approved, it looks like a pebble tossed into a churning sea.
Oh, we are so fucked.
So far, economists say, Europe’s response to the crisis in its banks has been mostly marked by denial and dissension.
From London to Berlin, governments are clinging to a piecemeal approach. The British and the Germans have resisted a broader solution, because they fear they will end up rescuing their neighbors.
As the problems in Europe have worsened, the crisis has taken on an “every country for itself” quality. When Ireland placed a guarantee on all bank deposits and debt last week, it angered neighbors, who feared capital would flee their banks to the safer haven of Dublin. Now, Germany, Sweden, Denmark and Austria have all pledged to guarantee deposits.
“If you do this one by one, it destabilizes people’s deposits in other countries,” Mr. Johnson said. “It’s mind-boggling that the Europeans have coordinated so little up until this point.”