Bank Dominos?

What I mostly wonder at this point is how the heck the dollar can be weaker than the Euro at this point?  Is Italy next?

Bank of Italy official Daniele Franco told parliament that the government’s  forecast of a 1.3 percent fall in gross domestic product this year could be in  doubt if market tensions worsen or a global economic recovery is delayed.

“We need effective and credible economic policies to interrupt the  recessionary spiral,” he said.

Depending on who you listen to, Italy went counter-clockwise about a year ago, but less people noticed because Greece was even more ugly at the time.  Is it me, or has Europe been in serious almost-over-the-cliff crisis for the last year?  Cyprus isn’t the beginning, it’s more the latest manifestation of a complex house of cards falling from the center in slow motion.

In the least we can say that the US has managed to have a multi-decade culture war and mutual disdain of different states to other areas of the country without creating a major currency crisis.  Sure, our economy has its warts, but it’s nothing like the mud pit in Europe right now.

And yet, through this, there doesn’t seem to be any indication of a need for reform of what is ailing Europe, and by extension there’s no push to do anything in the US.  The lovely wife and I were discussing how every agency in the US appears to be taking a worst-case approach to the loss of a small amount of gain that the sequester is causing, and wondering whether the government is doing the equivalent of holding its breath until it turns blue to keep all the programs going.

Through all this, Asia still seems to be covering its problems with a thin veneer of calm.  If the banks over there start to be obviously shaky… well, I hope you’ve stocked up on toilet paper.