The story of 2011? The crisis in the Euro.
Of all the events of the year, this is the story that carries the most direct danger or hope to the most people. If regarded as a single economy, the Eurozone is larger even than the economy of the United States. If the Eurozone cracks apart --if southern European countries begin defaulting on their Euro-denominated debt--we'd see a financial crisis and recession in Europe. That crisis and recession would surely spread to the rest of the world, including Canada and the United States.
If on the other hand the Euro is rescued through meaningful reforms, we can hope for more growth in Europe--and a more positive outlook for North America. Everything is at stake. The fate of the world economy, and very likely the outcome of the U.S. election, now depends on decisions made across the Atlantic. Which means the biggest story of 2011 will likely expand into an even bigger story in 2012.
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Yet many people who follow these events proclaim that government debt is immaterial, that Keynesian economics demands that we continue to rack up massive deficits year after year.
It's like seeing a smoker proclaim that smoking is perfectly safe even as he watches his smoking friends die of lung cancer.
When TBTF Banks or Countries Default the material event is ignored and more money is loaned to them by various means.
The Terrible Precedent being set by MF Global Stealing Cash from 40,000+ Customer Segregated Accounts to make JP Morgan whole. Trading already down 9% because of that skipping the financial middle man between customer and supplier..
Stop and think where does your retirement and investment income come from?
If you own a business where does your customer money come from?
Of course Corzine still hasn't been arrested.
Judge ruling No Conflict of Interest for MF Global Trustee client of JP Morgan and allowing bankruptcy to proceed as a commodities brokerage firm instead of equities to enable Customer Theft.
http://gonzalolira.blogspot.com/2011/12/run-on-global-banking-systemhow-close.html
This was seriously wrong—and this is the source of the scandal: Rather than being treated as a bankruptcy of a commodities brokerage firm under subchapter IV of the Chapter 7 bankruptcy law, MF Global was treated as an equities firm (subchapter III) for the purposes of its bankruptcy.
Why does this difference of a single subchapter matter? Because in a brokerage firm bankruptcy, the customers get their money first—because after all, it’s theirs—while in an equities firm bankruptcy, the customers are at the end of the line.