Jeffrey Sachs: "Clearly there's a lot of worry and there's a lot of uncertainty. But markets also have a way of jumping to conclusions and suddenly saying well they're not going to pay, it's all going to be restructured, looking at worse case scenarios and I don't think that we're anywhere close to the worse cases of sovereign defaults at this point".Newsnight Moderator: Alright panicker, panic.
"I think the market is panicky by nature and there is uncertainty, so the downsides could happen but I don't think they are inevitable".
Hugh Hendry: "I would recommend you panic. The European banking system is in crisis. Banks today are refusing to lend to each other, that's a reality. Bank share prices are collapsing and we have no ability to gauge the credit worthiness of the banking sector".Hugh then disses Sachs about the real world! Damn!! But then they agree on much needed banking reform. Watch Hugh Hendry debate with Professor Joseph Stiglitz about the Greece bailout in February (link). For recent posts featuring Hugh Hendry click here.
"Don't reward failing. The banking sector is responsible for gross failing. When you bring on a Professor and when you bring on a politician, they are unaccountable. If Jeffery's wrong you know what, he will survive in tenure, if I'm wrong I'll go bankrupt. Who'd you want to bet with?".
"I say lets purge the system of its rottenness".
Update: Europe’s Banks at Risk From Slower Growth, E.C.B. Says - New York Times
ECB: Banks Will Suffer Considerable Loan Losses In 2010, 2011 - WSJ