Question: A Greek, an Italian and a Spaniard walk into a bar. Who picks up the tab?
Answer: The Americans.
All financial eyes are once again trained on the European debt crisis, with investors worldwide wondering how it will play out. Not well, I’m afraid. Not well for the Europeans to be sure. And it will be costly for Americans, too.
Some of the pain has already been felt by investors who had accounts with Jon Corzine’s MF Global, now bankrupt from chasing higher-yielding bonds in the Eurozone. After a lifetime in high office and at Goldman Sachs, Corzine must have thought that if anything went wrong, everybody on Wall Street would just get bailed out again. He may have been right about that in the long run, but his timing was off.
(And to think that Corzine, who may now qualify to be a bunkmate of Bernie Madoff, could have easily ended up as U.S. Treasury Secretary. While that is a story for another day, it goes a long way to explain the financial mess the U.S. government is in.)