5 Articles to Help You Understand What's Happening in Europe (The Motley Fool)

Europe is in trouble. Big trouble. That's likely what's been causing fireworks in our stock market lately. If Greece and a few others default, a slew of European banks that hold those countries' bonds will be thrown into woe. Once a country's banking system is in distress, the rest of its economy suffers, exacerbating its sovereign debt problems. It's a vicious cycle that America is painfully aware of after our own -- albeit very different -- financial crisis in 2008.

American banks like JPMorgan Chase (NYSE: JPM - News), Citigroup (NYSE: C - News), and Bank of America (NYSE: BAC - News) have, by and large, insisted that their exposure to Europe isn't threatening. Federal Reserve chief Ben Bernanke said last week that American banks' European exposure is "manageable relative to their capital" -- a nice response, even if it's one he's obligated to give lest he cause a panic. Since so much of the financial system is opaque -- and, more importantly, built on confidence -- no one can say what might happen. Warren Buffett's quip that "It's only when the tide goes out that you learn who's been swimming naked" seems relevant here.

What should you make of it all? I recommend five articles that may help you better understand what's going on.

Fool contributor TMFHousel. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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5 Articles You've Got to Read (The Motley Fool)

There's a lot of information out there. Some of it is junk, some of it is frame-worthy. For every dozen foam-spewing-from-mouth rants out there, there's a piece of work that deserves your attention. Here are five you might enjoy.

Interview with Bill Gates
Daily Mail
A rare sit-down with the Microsoft (Nasdaq: MSFT - News) co-founder. Valiant attempt at humility: "I drive myself around town in a normal Mercedes." You know, not everyone has one of those, Bill.

Too Big Not to Despise
The Reformed Broker
The six largest banks -- including Citigroup (NYSE: C - News), Bank of America (NYSE: BAC - News), JPMorgan Chase (NYSE: JPM - News), and Wells Fargo (NYSE: WFC - News) -- control more than a third of deposits. Twenty years ago, the six largest held less than 10%. "No matter how many times one hears these stats or in what permutation, they are still infuriating."

Rosenberg: 99% Chance of Recession
Bloomberg
Gluskin Sheff chief economist David Rosenberg says there's a 99% chance we'll have a recession next year. Coincidentally, those are the same odds he created an outlandish prediction just to make headlines. Still, his logic shouldn't be lost: Recoveries coming out of financial crises are invariably fragile.

Australia's Big Dig for Foreign Workers
Reuters
Supply and demand wins again! Janitors making $100,000 a year. Mine supervisors making $200,000. "Australia, with a population of 22 million, does not have the workforce to exploit its enormous natural bounty."

How Inflation Swindles the Equity Investor
Fortune
A long, 6,000-word article written in 1977 by a then mostly unknown investor named Warren Buffett. More knowledge in this article than most four-year finance degrees provide. Do your bank account a favor and read the entire thing.

Got any of your own? Share 'em below.

Fool contributor TMFHousel. The Motley Fool owns shares of Wells Fargo, Microsoft, and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Browse your computer here

5 Articles You've Got to Read (The Motley Fool)

There's a lot of information out there. Some of it is junk; some of it is frame-worthy. For every dozen foam-spewing-from-mouth rants out there, there's a thought-provoking piece of work that deserves your attention. Here are five you might enjoy.

Henry Blodget: Sorry, LinkedIn's IPO Is NOT Proof of a New Tech Bubble
LinkedIn (NYSE: LNKD - News) should began trading today at a valuation that makes many gag -- or at least have flashbacks of the dot-com bubble a decade ago. Blodget, who admits his own, ahem, fond memories of the Internet bubble, disagrees. "Is 10-times revenue a high multiple? Sure it's a high multiple. But it's also a multiple that, depending on LinkedIn's growth over the next couple of years, could be well-deserved." How about this morning at over 20 times revenue?

James Surowiecki: Innovative Consumption
A really innovative way of thinking. American companies have the most fertile soil for innovation because American consumers are eager and willing to take the plunge into untested products. "In that sense, our culture of innovation depends on consumers as much as on entrepreneurs," Surowiecki writes.

Ray Kwong: Name You Need to Know: Aviation Industry Corporation of China
Boeing (NYSE: BA - News), this is what growth looks like: "China will need 4,330 new commercial airplanes valued at $480 billion over the next 20 years."

Rick Newman: There's Only One Way Gas Prices Will Really Fall
High gas prices always provoke a reflexive, yet shortsighted, response from consumers and regulators: Surely it's ExxonMobil (NYSE: XOM - News) and BP's (NYSE: BP - News) fault. Rarely discussed: High gas prices are the only surefire cure for high gas prices. Works every time, folks.

Annie Lowrey: Abolish the Debt Ceiling!
The debt ceiling has been raised 87 times since World War II, making it a very effective piece of legislation to vote on, and ... that's about it. "In and of itself, it does nothing to constrain spending, raise taxes, or otherwise improve the country's fiscal situation." So get rid of it, already.

Fool contributor free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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