Trouble looms large
Posted on | May 10, 2010 | No Comments
Over the past several days, it has become clear that the European
powers that be have failed to
avert the economic disaster that
has lain in our path like a massive improvised explosive device in Afghanistan.
The conference that I’m speaking at, Mare Forum, holds a session in Italy each year.
This one is entitled “Optimism in the Air”. The headlines, however, say “Banks Brace For Spread of Europe’s Credit Crisis”.
What is now happening is that nobody really knows what’s happening. We do, however, realise that our lack of information about which European banks are vulnerable to sovereign debt problems, and therefore defaults on government bonds, means that virtually all lenders, including those to shipowners, will stop making short-term loans to one another.
This very likely will lead to a second freeze in interbank lending, like the one that followed the failure of Lehman Brothers in September, 2008.
Another good example of how what started in Greece will have an impact on the global shipping industry. More on this, and the unfolding oil spill in the Gulf of Mexico tomorrow.
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