Take a breath, the week enters uncharted developments

Another week has began again full of happenings in the economical and political front. Tomorrow, Tuesday, McCain and Obama will face each other in their second debate. I will watch it but this time I will see a rerun as I don’t fancy staying up for its beginning (here in Europe) at 3am! In any case, I already sent my absentee ballot as unless there is an October surprise nothing much will change from here to voting day. Also, I think we all know what they are going to say and promise. A good joke really if one thinks about it as whoever becomes president is going to have such a lack of money to govern, between the enormous deficit and the bailout, that all those grandiose promises and projects they are making are going to be impossible to accomplish. So, voters beware…
Today, instead of politics it has been a day to concentrate in the economical news. And good those news have not been. In the US the day and whatever is will happen in the stock market is still unfolding. In Europe, since the weekend, we already had our share of worries and bad news as a systemic collapse is inevitable. The Netherlands has just rushed through a second, more sweeping nationalization of the bank Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an outcome similar to what happened in Argentine. Yesterday in Germany, Chancellor Angela Merkel took the decision to guarantee all private bank deposits. Austria and Denmark followed suit and Spain threaten to do so if the EU did not take action. And today, Monday, Sweden became the latest European country to offer new protection for bank deposits. Finally, expectations were high that Alistair Darling, the British chancellor of the Exchequer, would be forced to announce similar measures by the end of the day, even if he and Prime Minister Gordon Brown were keen to avoid such blanket guarantees.
As I am writing this, Monday at 4:15 pm European time, the French president, Nicolas Sarkozy is receiving the directors of the main banks and insurances companies. The crisis appears to be the most serious one to face the EU since a common currency, the euro, was created in 1999. Jean Pisani-Ferry, director of the Bruegel research group in Brussels, said Europe confronted “our first real financial crisis, and it’s not just any crisis. It’s a big one.”