Dopey, it all sounds like financial engineering and creative accounting is getting too complex and too arcane and far too difficult to regulate - yet again (the mistakes of the past are coming back to haunt us).
Speaking of mistakes of the past, the largest mortgage lender in the U.S. is getting back into subprime home loans again to try to stem its revenue decline because overall mortgage lending volumes have plunged. Have we learnt nothing from the last financial crisis? Here we go again...
Anyway, back to more pressing problems in Europe (and no I won't even mention the PIGS) the centre of the financial storm has blown from southern Europe to central and eastern Europe (Russia, Poland, Hungary, Czech Republic & Turkey etc.)
Since the start of 2014 interest rates on interbank loans have surged throughout Europe. Europe's banks are so interconnected and so highly leveraged and laden in debt that even a small rise in rates can have dramatic effects.
If investor sentiment continues to switch from risk-on to risk-off we'd see bank liquidity evaporate and a resulting cash crunch would hit Europe hard, starting in these most vulnerable counties;
Turkey has seen its currency collapse 20% against both the euro and the dollar over the last year and yields on their debt have jumped above 10%.
Hungary remains the most indebted nation in central and eastern Europe with a debt-to-GDP ratio above 80% and bond yields are rising there too.
Poland's economy is growing at its slowest pace since 2009 and unemployment is at a six-year high of 13%.
Ukraine is on the brink of civil war, stocks have tumbled, its currency is collapsing and CDS and yields have spiked higher.
And I haven't even mentioned the same old problems resurfacing in the PIGS. 2014 is sure to be one to remember, especially in Europe.
