WSJ Notes Increasing Stress In System
The situation in Europe has been, and continues to be, very serious. The Wall Street Journal (WSJ) summed up the week this way:
Many weeks have been called the worst of the financial crisis. But this one has as good a claim as any. Wild swings in euro-zone bond markets and a further deterioration in bank-funding conditions have raised many stress indicators to levels last seen following the 2008 collapse of Lehman Brothers. The difference this time is that policy makers have fewer bullets to fire.
Unless something changes with the European Central Bank (ECB), the upside potential and downside risks continue to be skewed significantly toward the bearish end of the spectrum. The gravity of the situation is illustrated in the WSJ chart below.
