US Action News

This should bury the notion the eurozone recession will be short and shallow.

It is becoming increasingly clear that the upper crust of the financial world considers a Greek exit from the euro to be “inevitable” and that it also considers much of the rest of southern Europe to be a lost cause. Unfortunately, a financial collapse across southern Europe is also likely to trigger another devastating global recession.

Activity at European businesses hit a near three-year low in May, according to a survey by Markit. – BBC News

America is set to push the global economy right into the tank. The non-US members of the G8 are well aware of these facts. They must be crapping in their pants at the prospects.

If Greece leaves the euro it will set a very dangerous precedent. The moment Greece exits the euro, investors all over the globe will be asking the following question: “Who is next?” Portugal, Italy and Spain would all see bond yields soar and they would all likely experience runs on their banks. It would only be a matter of time before more eurozone members would leave. In the end, the whole monetary union experiment would crumble.

Francois Hollande has been sworn in as president of France, becoming the first Socialist leader in 17 years to occupy the Elysee Palace. – BBC News

When Europe descends into financial chaos, the United States is not going to escape it. The financial crisis of 2008 deeply affected the entire globe, and so will the next great financial crisis.

In the few moments since the Spanish 10-year crossed 6 percent, European markets have turned around and are moving into the red. Spain is now down over 2.6 percent. – Business Insider

Nouriel Roubini who is famous for predicting the financial collapse which earned him the nickname “Dr. Doom” cited a Middle East conflagration oil crisis, “austerity fatigue” and “bailout fatigue” in Europe, and the “fiscal cliff” faced by the U.S. in a doom and gloom scenario.

First the UK now Spain. Are the dominoes falling? “Spanish government is considering helping the banking industry by allowing them to put bad loans into a government-organised fund.” – BBC News