Europe in Crisis.?!

Europe Debt Crisis - Domino EffectHeadlines are meant to grab your attention, make a statement and pique curiosity, among many other legitimate purposes.  However, they rarely tell a story accurately or completely.  Often headline writers seem to delight in creating some cleverly turned phrase or esoteric quip intended to manipulate their audience’s sensibilities.  But we’d never go there here at SMB Matters.

The sovereign debt crisis transcends the touchpoints of the grand dream of modern Europe (which span across decades that brought Europe from the single market towards the economic union to the common currency, and ultimately a political union), and has transformed into a wider crisis about the European Union as a whole.

In the end our headline is not the story, but you find knowledgeable people framing this complicated matter by posing the follwing interrelated questions: How to punctuate “Europe in Crisis“?  As a simple fact(.)? As a rhetorical question(?)? Sound the alarm(!)?

On the very day of the historic Europe-wide downgrade, the head of the world’s largest bond fund did what you might expect him to do — he hedged.  In a commentary cross-posted in many outlets, Pimco‘s Mohamed El-Erian punctuated the question in each way.  He first noted that the market valuations had already taken the issue of downgrade(s) into account as fact, with debt yields reflecting the “old news” of the downgrade and its risks.  The Pimco CEO then pivoted to the exclamation, warning of the consequential impacts that would be felt within the Eurozone, such as a weaker Euro and increased market pressure and volatility.  Finally, El-Erian’s blog employed the classic “known unknowns” analysis, setting up a very effective cliffhanger for his audience to ponder the question of Europe’s uncertain future and likely effects upon the entire international monetary system from this historic crisis.

One of the world’s most respected economic minds managed to pose the question all three ways.  Which punctuation was right? We will put this to the SMB Matters blog team for their opinions in future posts, but we invite our readers a chance to register their own thoughts through the unscientific poll below.

Editor’s Note:  This post follows an earlier article from SMB Matters’ resident finance lackey  guru, Richard, who recently presaged the crisis now manifesting in the current European Bank Downgrade in the first installment of his Series on Global Finance and SMBs.  As an exercise in editorial discretion, we staggered publication of the Series to ensure that the discussion has a chance to develop before a competing topic shifts the focus elsewhere.  While Richard might expect a pat on the back for his rhetorical query asking what would happen if the European Union’s dilemma escalated, the SMBM Editorial Staff would also take this opportunity to point out the apparent wisdom of letting this story “fully ripen”.  In light of the renewed currency of this issue, this article includes a number of articles and commentary intended to reference differing opinions and analysis across the spectrum.  Let’s hope that the global economy can avoid the rot of an overripe crisis.


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