THE QUIET CRISIS – AT 7:58 P.M. ET:  As we struggle to recover from the worst economic crisis since the Great Depression, events in Europe may make it more difficult, threatening the whole world's economy in the process:

(Reuters) - Rating agency Standard and Poor's slashed Greek debt to junk status on Tuesday and also downgraded Portugal, as investors worried political pressures could block a multi-billion euro bailout of Greece.

Markets in Europe and the United States tumbled in reaction to signs that the Greek debt crisis was spreading to other highly indebted states on the periphery of the euro zone.

"It's contagion from the Greece crisis which has spiraled out of control," said William Sullivan at JVB Financial Group in Florida.

"It's like coconuts falling from the tree. There's a flight from sovereign debt issuers that have suspect national finances."

Sullivan said there was "outright panic" among investors who feared they would lose some of their principal if Greece restructured or defaulted on its 300 billion euro debt.

COMMENT:  Some European countries are in far worse shape than is the United States.  But they'll keep lecturing us nonetheless.

There's a growing fear that increasing debt around the world will make the next big bust far worse than the collapse of 2008.  Of course, the revolutionaries would love that...until it happens.

April 27, 2010