The WaPo has an article on the EU’s disastrous economies:
One false move in Europe could set off global chain reaction
The article had a puzzling photo Treasury Secretary Timothy Geithner holding a basketball, and the only tie-in to the article itself was a caption, “Treasury Secretary Timothy F. Geithner in Beijing on Sunday. The euro crisis may discourage China from a currency policy he seeks.” That would be the least of his troubles. But I digress.
My inner pessimist – which is surprisingly strong these days – scoffed at this line (emphasis added):
If the trouble starts — and it remains an “if” — the trigger may well be obscure to the concerns of most Americans: a missed budget projection by the Spanish government, the failure of Greece to hit a deficit-reduction target, a drop in Ireland’s economic output.
The following paragraphs have a variety of mixed metaphors. Please proceed with caution.
What do you mean, it remains an “if”? The PIIGS are in trouble, and it’s only a matter of time before the entire EU farm follows. The article itself points out that the handwriting’s not just on the wall, it’s on the markets:
That the dominoes can tumble fast was shown Thursday when a new and narrowly drawn stock-trading policy in Germany helped trigger a sell-off on Wall Street.
It marks a change, Barclays Capital chief European economist Julian Callow wrote in a Friday analysis, from a situation in which the bonds of European countries were considered to carry virtually zero risk to a “brave new world” where sovereign default in one of the world’s core economic areas is a tangible threat. Bank holdings of European debt are now being studied with the same focus given to holdings of U.S. mortgage-backed securities as the global financial crisis unfolded in 2008 — and with the same suspicion that problems in one part of the world could wreck others.
The most vulnerable European countries — Greece, Spain, Portugal and Ireland — may represent only about 4 percent of world economic activity, but “the debt crisis and its ripple effects are bad news for all corners of the world,” said Cornell University economist Eswar Prasad.
We can fool ourselves into thinking that it remains an “if”, but the only “if” is, “if it makes us feel good” in the middle of the storm.