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I know it’s fashionable to blame the U.S., but the problems abroad are truly amazing when compared to our own.  We really do look like a AAA company compared to most of Europe and that’s scary because we are running like a broken down ’57 Chevy.    While debt ran wild in the U.S. it was bordering on insanity levels in Europe.  Not only was Europe’s housing bubble far larger than our own, but Europe’s banks were far more leveraged than Americas and issued over $3.5 trillion to emerging market countries compared to just $700 billion for U.S. and Japan combined!  In addition, the latest data on Europe’s consumers is showing severe indebtedness and fiscal irresponsibility:

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Although improving, the household savings rate across Europe is still far too low while debt as a % of GDP remains unsustainably high.  I am very worried that Europe could be in the early stages of this crisis.  Debt levels remain far too high and housing prices have not adjusted nearly enough to the downside.  Comparatively, the U.S. and most of Asia appear relatively healthy, but in this global economy it’s hard to imagine a sharp rebound anywhere if Europe remains in the doldrums.