Major banks on both sides of the Atlantic are on the verge of collapse, and investors all over the world are afraid that we may have another "Lehman Brothers moment" soon. Shares of American Airlines dropped a staggering 33 percent on Monday as rumors that they will soon be entering bankruptcy swirled.
Yes, things certainly are getting interesting. Back in 2008, the governments of the western world saved the financial system with gigantic bailouts that were absolutely unprecedented. If the financial system crashes again at some point in the coming weeks or months, will the political will for more bank bailouts be there? If not, what is going to happen to the banking system?
On both sides of the Atlantic, the big banks are highly leveraged, they have taken on a ton of risk and they are very deeply exposed to derivatives. It is as if virtually nobody learned any lessons during the financial crisis of 2008. Once again we are facing a situation where if a couple of financial dominoes fall it could send dozens of others tumbling to the ground.
Some very significant things happened on Monday. But the media has gotten so used to reporting on tremendous financial instability that Monday's events mostly got brushed to the side. Instead, Amanda Knox captured most of the headlines.
On both sides of the Atlantic, the big banks are highly leveraged, they have taken on a ton of risk and they are very deeply exposed to derivatives. It is as if virtually nobody learned any lessons during the financial crisis of 2008. Once again we are facing a situation where if a couple of financial dominoes fall it could send dozens of others tumbling to the ground.
Some very significant things happened on Monday. But the media has gotten so used to reporting on tremendous financial instability that Monday's events mostly got brushed to the side. Instead, Amanda Knox captured most of the headlines.
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