A friend of mine who’s a higher up at an investment bank — the same guy who told me in 2006 that there would eventually be a huge real estate crash and that it would destroy Bear Stearns first, then Lehmann Brothers — started texting me from Europe yesterday about how frightening the economic situation is over there. He says he thinks austerity will hurt Europe even more than people think, partly because the system there has more trouble adjusting to sudden government changes than our system does. As things get bad, he expects to see more and more immigrant-bashing (some of you don’t like it when I say this, and I know it’s a generalization, but Europeans as a group are much more xenophobic than Americans), with Eastern European/Baltic immigrants in western Europe getting sent home, which makes things worse, especially for Eastern European/Baltic countries. He thinks that in some places, the Strapping Young Bucks may turn on their Galtian overlords in a serious way, and that the best thing might be for some low-level Baader-Meinhoff-type activity to scare the Galtians straight before things get too dire.
He’s not optimistic about the US economy, either, but doesn’t think it’s in anywhere near as much as trouble.