Disaster Movie Gets a Sequel, With Subtitles

The New York Times reports:

the downgrade is almost a sideshow compared with the real reason that stocks started falling Monday morning, before panic set in and the momentum of the market took over: the intractable problems in the European Union, which look a lot more like the United States banking crisis circa 2008 than what’s happening on this side of the Atlantic now.

Pretend for a moment that countries like Greece, Spain and Italy are our banks in 2008. They are close to insolvent. (And the actual banks in Germany, Britain and France that are supposed to be strong are horribly undercapitalized and are holding too much debt from countries like Greece, Spain and Italy — all countries that truly may not be able to pay it back in full.)