ECONOMIC MELTDOWN UPDATE….Here in the U.S., we’ve now seen the collapse of Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, and Lehman Brothers, as well as the more-or-less-collapse of Countrywide and Merrill Lynch. In addition, AIG and WaMu are teetering, and perhaps Morgan Stanley and Goldman Sachs too. Current conventional wisdom, speaking in that scarily even tone that airplane pilots assume when both their engines have flamed out, suggests that the U.S. financial system might melt down completely this week. Conversely, the cheery optimists think it might avoid it for the next few days anyway. I’d guess the optimists are right, but it’s not as if I’d be willing to put any money behind that bet.
But here’s a question for one of the serious econ-bloggers out there: Have lots of big non-U.S. banks collapsed? There was Northern Rock, but anyone else? Are any European financial systems in danger of meltdown? Why not?