Friday, May 18, 2012

Update on Euro Crisis

This is another gloomy news for the world economy particularly Europe. apart from Greece which is havingthe worst problems, Spain is now on the scene as headlines today are: Moody's downgrades Spanish banks. To quote part of the news:

 Rating agency Moody's downgraded 16 Spanish banks on Thursday, the latest sign of distress in Europe.

Among those downgraded were giants Banco Santander and BBVA, the country's two largest banks. Moody's cited concerns about the banks' exposure to Spain's faltering economy and the "reduced" ability of the Spanish government to support them in a crisis.

"The Spanish economy has fallen back into recession in first-quarter 2012, and Moody's does not expect conditions to improve during 2012," the agency said.

"Moreover, the real-estate crisis that began in 2008 is ongoing, and unemployment has risen to very high levels, with rising risks to white-collar employment (in addition to extremely-high youth unemployment) affecting the outlook for banks' household lending."

Caution is needed, IMO, right now..........