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The European Central Bank is indebted to the hilt and is beginning to look like one of the banks it has done so much to save.
Having subsidized the European banking industry with its 1 trillion euro ($1.29 trillion) long-term refinancing operation (LTRO), funds that were distributed at well below market prices, the central bank is leveraged to levels Bear Stearns and Lehman Brothers might have felt comfortable with in early 2007.
WASHINGTON — Discouraging economic data from around the globe have heightened fears that another recession is on the way.
Fresh evidence emerged Thursday that U.S. home sales and manufacturing are weakening. Signs also surfaced that European banks are increasingly burdened by the region’s debt crisis and sputtering economy.
The rising anxiety ignited a huge sell-off in stocks that led many investors to seek the safety of U.S. Treasurys.