Posts
Johnson: "Either the Europeans now go their own ways or — more likely — a core group moves toward greater integration, including integration of fiscal policy. But it seems unlikely that this new core will include Greece, and the thinking in financial markets is that Portugal and some others (Spain? Ireland?) will also be excluded. The “out” countries would presumably leave the euro or, if they refuse, the “in” countries could leave to set up their own bloc. Either way, it will be messy..."
Reinhart: "In prior remarks, I have likened speculators to vultures. They circle when the end is near. But vultures must smell something is rotting. Thus, speculators often pinpoint the timing of the crisis. Blaming them for the underlying cause of the crisis another matter, In most of the banking, currency and debt crisis episodes I have studied, the seeds of the crisis are sown in the boom (see answer below) when debts are piled on."
