While America is Ransacked
A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.
Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group?s implosion nearly three years ago.
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?The problem is a shortage of liquidity ? that is what is causing the problems with the banks. It feels exactly as it felt in 2008,? said one senior London-based bank executive.
?I think we are heading for a market shock in September or October that will match anything we have ever seen before,? said a senior credit banker at a major European bank.
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