Debt crisis: the long view

Confidence in Europe's ability to manage its debt crises is eroding by the hour, with bleak prognoses appearing on all sides. Credit for the most incendiary remark of the day--despite tough competition from the Bundesbank's Axel Weber, whose speculations on the size of the eventual bailout drove bond rates skyward--must go to Michael Pettis, financier and economist at the University of Beijing, for his vatic remark, below:

"This has been said before, but in a way this crisis is the European equivalence of the American Civil War. Once the dust finally settles Europe will either be a unified country with fiscal sovereignty firmly established in Berlin or Brussels, or it will be fragmented with little chance of reunion."

One can only guess which new financial instruments will replace the gatling gun and the ironclad warship in this post-modern replay.