Greek crisis: the blood-letting goes on

[CHIMO]

Another day, another day of mayhem in the financial markets.

Shares across Europe are taking a thumping, the euro is again under severe downward pressure on the foreign exchanges, investors are once again fleeing to the safe havens of gold and the dollar.

The economic news is not universally weak, with a pickup in vehicle sales in the US suggesting that consumer demand in the world's biggest economy is holding up relatively well. The price of Brent crude looks set to fall below $100 a barrel, reducing the costs of doing business and boosting real incomes. Even so, it's hard to argue with Michael Derks, chief strategist of FxPro, when he says markets are in a "vortex of fear".

Why is that? Well, the trigger for today's sell-off was the deepening crisis at the Franco-Belgian bank Dexia, which is in so much trouble that a major restructuring now looks inevitable. The fear is that it may not be the last bank to run into problems over the coming months as Europe's sovereign debt crisis unfolds.

http://www.guardian.co.uk/business/economics-blog/2011/oct/04/greek-debt-crisis-blood-letting