For the past two years, the world has been watching as Europe's financial situation continues to deteriorate.
From the beginning, this has been a slow-motion train wreck. And our guest Josh Rosner, managing director at Graham Fisher & Co., says we're getting closer to the crash.
The fundamental problem in Europe, Rosner says, is a "solvency crisis," not a "liquidity crisis." In other words, countries like Greece, Ireland, and Portugal simply can't afford to pay back their debts. And no amount of short-term funding or budget austerity will ever fix that.
The only way out, Rosner says, is a restructuring of these sovereign debts, a write-down of their value by the banks that own them, and a re-capitalization of th banks by their sovereign governments. But the level of coordination required to make that happen smoothly will be extraordinarily challenging to pull off.
Thus, Rosner thinks Europe's train wreck is headed for an eventual crisis.
On the positive side, Rosner does think the European governments will be able to forestall this crisis for another 3-6 months--by introducing more of the same promises and emergency measures that France, Germany, and the European Central Bank have implemented thus far. But they won't be able to forestall it forever.