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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

November 16, 2010 at 9:30 AM

Top o’ the mornin’: Irish ‘debt’ crisis is really about bad banking

This is one of those rare days when it’s fairly clear what’s moving the market, in this case a 195-point swoon as I write. European sovereign debt fear has re-emerged with Ireland and Portugal fighting the bond-market bears and facing a potential EU bailout. Meanwhile, China took some tightening measures against inflation — or in retaliation against the Fed’s easing — which started the market drop in Shanghai.

The big problem in Ireland is a real-estate bust and troubled banks — sound familiar? Even though the country has undertaken austerity measures, it continues to force the costs of bank bailouts on the public and the public debt. Ireland became a model of economic development by going after high-tech manufacturing, leveraging its educated workforce and then targeting scientific breakthroughs.

Unfortunately, all this was overwhelmed in the 2000s by the same real-estate and financialization mania that happened here. Meanwhile, Simon Johnson and Peter Boone have a fascinating piece on how the sanctimonious Germans are actually making the EU crisis worse.

Amid the macro slide, Seattle stocks are all lower. Nordstrom didn’t get any love despite its sharply higher earnings report; Wall Street had already priced that in — now it wants more. Microsoft is holding its annual meeting this morning. Boeing is flying two 787 Dreamliners back to Seattle after an electrical fire grounded another test 787 in Texas.

Today’s Econ Haiku:

Start-up to target

Isilon’s trajectory

Too familiar

Comments | More in Banking, Eurozone, Global economy

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