Our Friendly "Neighborhood" BankerI mostly agree with "Mish" Shedlock's presentation. The problem is severe and it will spread like falling dominos. Spain, Portugal and Ireland have huge problems that are not fully appreciated in the US. What is also not well understood it that our modern banking system is all interrelated to each other. Under normal conditions a bank in Germany could count on a transfer from Spain to actually happen. But the amount of government debt owned by Spanish banks dwarves the bank's reserves. This means that a German bank might be left "holding the bag" when the Spanish banks fail. The problem spreads rapidly. (Hmm, the bank I use in California is owned by a Spanish bank ...)
Japan is in particularly bad shape, as Mish discusses in this video.