This morning the Watchdog received this message from the Wealth Management Department of one of the nations’ largest banks, hardly a bastion of liberal thinking.
“Our view is the market volatility continues to revolve around concerns regarding the global economic recovery and the possibilities of a double-dip recession. These fears have been exacerbated by the anemic first-half economic growth in the United States and the continuing fears that the Eurozone sovereign debt crisis might cause financial contagion affecting the global economy.”
Sound familiar? The sell off isn’t about our national our annual debt. It isn’t about deficits. And it isn’t about ratings.
It is about “the anemic first-half economic growth” which is due to slashes in local, state and government spending and conservatives unwillingness to stimulate the economy.
As for Europe, the bank certainly won’t suggest it, but the crisis would be greatly mitigated if the lenders shouldered some of the burden of their greed in lending to those less likely to be able to repay. If the banks took a ‘haircut’ by reducing the interest rates and stretching out the time for repayment, all would soon be well again.
Of course some banks might have to temporarily give the EU equity interests in exchange for funding, much as what occurred with our highly successful TARP bill in 2008.
