Trichet is shitting himself. He's head of a European Central Bank that doesn't control the central banks of the Eurozone nations. European banks make US banks look like well-capitalised models of regulation. They've lent billions to eastern European economies that are being described as "basket cases" and "clinically dead" by their own finance ministers. The Ukraine looks like the one first to go pop but there's a lot of competition.

There's also a lot of competition for first Eurozone lending country to blow up. A couple of weeks ago it looked like Ireland would win, then Austria took the lead, then Portugal/Italy/Greece/Spain ( new acronym ), then the UK took the lead then motherfunking Switzerland then Germany then back to Ireland at the end of last week.

So Trichet needs to get European countries to backstop him setting up a two trillion plus stabilisation fund to bail out Eurozone lenders/non Eurozone landers like UK or Switzerland/eastern European basket cases. Pressure will grow for this as the crisis gets worse but Trichet will find herding cats easier.


Canada's retail sales are dropping. So are everybody else's. Retail sales are 60+% of every major economy's GDP. They used to be propped up by consumers taking loans against the rising value of their homes. Now consumers are looking at underwater home values and still have the debt secured against their former high values to pay back. And if we tip into deflation and their wages are cut the debts stay priced in old money. You can imagine what that will do to spending on an ongoing vicious circle-type basis. You should cancel that bet with Lyle.