“Failure is not a single, cataclysmic event. You don’t fail overnight.
Instead, failure is a few errors in judgment, repeated every day.” –
Jim Rohn (1930-2009)
Much attention is consumed on the “failure” of various systems, plans
and policies. The European banking system is in shambles, and the
residues of the sovereign debt crisis have not fully played out. These
are tiresome topics desperately needing resolution, as the era of
postponement is no longer viable. The pain felt from the real economy
contributes to a lack of patience in the audience.
In the near term, the Federal Reserve is already providing dollar
liquidity to European banks. In a sensitive environment bad news is
magnified (downgrades or weak growth), while infecting or at least
influencing other economies at a rapid pace. There is no escape from
this matter, even for the strongest economy in Europe. ³Germany’s 10
biggest banks need 127 billion euros ($175 billion) of additional
capital² (Reuters, September 18, 2011). This is a historic period
where the Eurozone is being redefined, with desperate times leading to
ugly and unimaginable results.
Overnight scrambles, quick solutions and projection of confidence are
required by European leaders during this ³reconstruction² period.
Plus, the details of the current banking procedures, along with
consequences of alternative solutions, are sensitive just as much as
complex. In other words, the pressing problems are too cumbersome for
any political slogans in Europe or the US. Obviously, the nature of
governing and conducting markets inevitably includes political and
stimulus constraints. This theme merely sums up most of this year,
especially in Europe when dealing with various nations. Interestingly,
the bailout debate (similar to the US banks in 2008) is not erasable
from near term memories, and heated debates are only normal at this
point.