Greece. Spain. Portugal. Contagion. European Banking Crisis. Sovereign Defaults. These were some of the words being thrown around today to explain the big downward dive in global equity markets. A few weeks ago I mentioned Greece and made reference to John Mauldin saying “there is not a happy ending here.” Still true. There is no happy ending to countries spending way beyound their means.I have to say I had a sinking feeling on my way in on the train this morning. Why? Because I read the newspaper. The article that really caught my attention was yesterday’s piece in the FT by Martin Wolf ( love him )”A bail-out for Greece is just the beginning.” ( love the FT) The article describes the bailout package for GREECE and why they are unlikely to avoid a debt restructuring. Greece is certainly in the worst situation “but several (others )have unsustainable fiscal deficits and rapidly rising debt ratios.” Just like the US subprime problem, there is a lot of debt that is going to need to be written down and it mostly the European banks that own it. Is round two of the financial crisis about to unfold? How the heck do I know, but I certainly think there are some very big problems out there that would argue for a more defensive posture.