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Josh Brown: European banks on the precipice of a crisis

Joshua Brown of Fusion Analytics.

Jeremy Hobson: Here in London this morning, the first question that was asked at the BBC's business news meeting was: is the European debt crisis turning into a banking crisis?

And that's where we're going to start with our regular Wednesday guest, Josh Brown of Fusion Analytics, he's with us live. Good morning.

Josh Brown: Hello, how are you?

Hobson: I'm great, Josh. So leaders here in Europe are sort of trying to figure out today what they're going to do about this troubled Belgian bank Dexia which is having problems. They don't want the problems to spread across the financial system -- is this now a banking crisis in Europe?

Brown: You know I think if we're not at the point where it's a banking crisis, we're right on the precipice. The important thing to understand is, all of these major European banks are also big holders of the bonds of these countries. So if there's any question that any of these countries' bonds are not worth a hundred cents on the dollar -- so to speak -- right off the bat you get into this zone where there could be a banking crisis.

Hobson: And how much of a concern is that where you are, in New York on Wall Street?

Brown: You know I don't think we're quite there. The only bank rumored to have big exposure to French banks, for example, is Morgan Stanley. But really, it's not a huge a concern, we have our own problems we're working on.

Hobson: Josh Brown of Fusion Analytics, thanks so much as always.

Brown: Thank you so much.

Joshua Brown is a New York City-based financial advisor at Fusion Analytics. He helps people invest and manage portfolios for them. Josh's clients range from individuals to corporations to retirement plans to charitable foundations. He is also the author of The Reformed Broker, one of the top 10 financial blogs in the United States.

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THANK TO EVRYONE FOR ONDERSTAND OUR LAST COMMENTS IN EUROPEAN CRISIS. WE ARE PLEASED TO SEE AND EAR THE SYSTEM TO GEATHE IDEA AND KNOWLEDGE ; ( FUSION ANALYTICS) in this way; we hope to find and cure the european bank crisis from now with other like DEAR JOSHUA BROWN for rput all the affaire in god rail and start to work tgether in liberal system from bottom o high THANK YOU

So why is it that if financial advisors talk to you, they don't have to disclose their own or their company's market positions?

I don't get Josh Brown here, saying this is not a huge concern because we have our own problems we're working on... just because there are problems here doesn't mean problems elsewhere can't compound with "our" issues, or ignite contagion.

Hobson: And how much of a concern is that where you are, in New York on Wall Street?

Also, when he says "we" he means the money guys on Wall Street, not you and I guaranteeing bank losses in FDIC, or Fannie debt, or our Pension and retirement systems that are well exposed to the greater financial system.
A greek default and Dexia X 10 = major major disruption in the financial markets that sovereign nations have less and less actual money, and political will or ability, to counter.

Is he saying that the only way we'll be able to weather this is by putting our own house(s) in order? Sounds like someone letting Lehman fail again due to moral hazard... I assume his portfolio is properly hedged - how about the 401k of the average guy who listens to Marketplace?

Brown: You know I don't think we're quite there. The only bank rumored to have big exposure to French banks, for example, is Morgan Stanley. But really, it's not a huge a concern, we have our own problems we're working on.

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