The German Government has approved a 70 billion Euro deal to save Hypo Real Estate bank. The financial crisis has therefore finally reached Europe, and it has done so in full force. I do not know how bad the situation of banks is here in Germany, but I can imagine that the loss of trust in the system is going to cause a great deal of agony in the near future.
I am not really worried, yet. But I do wonder how many hits the financial system can take before it starts to sink. It is important to remember that actual numbers on a balance sheet matter rather little if panic sets in and the dreaded “run on the banks” begins.
I do have the gut feeling that the situation is going to get a lot worse before it gets better.
oh yes. we’re in trouble. but i’m looking on the bright side: i am within reach of being self-sufficient if i need to be (as in water, food, clothing, etc). i’m just hoping i don’t need to…because it won’t be any fun.
Welcome to my “other” blog, Alex.
I wrote the posting before the 500 billion Euro bailout here in Germany… Just thinking about that makes me sick. I am beginning to think that maybe letting all these banks fail would not be a bad idea. Teach the private sector a lesson, maybe, to not screw up so badly?
And if anybody seriously suffers when their bank dies… those 500 billion could just as well be used to help them.
Anyway, like every crisis, this one will end too, and I am trying to look at the bright side: There’s scarcely a better time to invest than when stock markets are deep in the hole. Now if only I had any money left to actually buy some shares..
As a PS: The BBC has a fairly nice overview of what’s happening in what countries.