What went wrong overnight in Europe to cause such a major sell-off?
The fear of a European "Lehman" is over-whelming!
First, there was concern that the Greek bailout could fall apart, if Finland requires additional collateral from Greece.
More importantly, there is a rumor that some bank had to borrow $500 million from the ECB overnight, paying a high 1.1%, compared to the normal cost of 0.7%. That strongly suggests some bank is in serious trouble, but nobody knows who that bank is. Therefore, since European bank stocks cannot be shorted, all European bank stocks got sold.
The fear of a European "Lehman" is over-whelming!
