According to Atrios/CNBC, the european banks have an aggregate $24 Trillion of "toxic assets" on their books. Yikes. Fareed Zakaria wrote a couple weeks back that the European banks have tended to leverage themselves at much higher rates than US or canadian banks: Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. No wonder they were able to accumulate such levels of toxic assets. I lost the original cite, but I read somewhere else that AIG's London office was primarily responsible for the worldwide Credit Default Swap crisis.
My point here is that it's been the common tendency to view the looming depression as an American problem, fueled by the American housing bubble and banking practices. Perhaps that is still true. But it appears that there may be much more of a European component than previously recognized.
And here's your Official Scary Graph of the Day:
Oh boy.
My point here is that it's been the common tendency to view the looming depression as an American problem, fueled by the American housing bubble and banking practices. Perhaps that is still true. But it appears that there may be much more of a European component than previously recognized.
And here's your Official Scary Graph of the Day:
Oh boy.
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