Greek Drama Leaves a Global Audience in Suspense
Just when it seemed that the epic financial drama of the early 21st century was coming to a close, the fates intervened. Suddenly, it was Sunday night again, and officials were racing to craft a rescue plan as markets opened in Asia. One big difference: This time the setting was Brussels and Frankfurt, not Washington and New York. Another: This time it was the creditworthiness of governments, not banks, that provided the tension.
In Act One, the U.S. housing bubble bursts, and we learn that much of American finance was resting on the simple, but wrong, assumptions that house prices would never fall across the country and that modern finance was spreading risk rather than concentrating it. In Act Two, the U.S. government responds, but hesitantly.