A couple of days ago, at the end of a post on reasons for optimism regarding the economy, I promised that the following day we would discuss what could go wrong. And of course, something did go wrong—I didn’t discuss it. In any event, Friday the 13th just seemed like the right time to discuss the downside—so here we are.

Uncertainty continues

Back in the day, I understand, stock dividend yields were higher than bond returns. They had to be, you see, because stocks were so much riskier that investors demanded the return premium. Gentlemen preferred bonds.

I have been looking for a metaphor that usefully and accurately describes the European crisis, and I think I finally have it. The moment of enlightenment came last night when I was talking with an advisor at Commonwealth’s Retirement Symposium (which looks to be fantastic for the second year running) about our kids. This advisor has teenagers, and as we were talking, I found my metaphor. I hasten to add that this is based on my experience—not that of the advisor and her kids.

When I was in college, through some colossal mistake, I was issued a credit card by Citibank, who must have held the theory that my parents would make good on my debt if (when) I overspent. To make a long story short, I learned an expensive lesson: my parents declined the opportunity to bail me out, default was not an option, and it required personal austerity on my part to pay off the credit card.

Two sets of meetings going on now are expected to help resolve the current financial and economic problems. The G20 meeting—followed by a meeting planned for this Friday of Germany, France, Spain, and Italy to prep for the eurozone summit next week—is one set, and the Federal Reserve meeting, which will end this afternoon, is the other.

The contrast between the two is instructive. On the one hand, the first set is a group meeting followed by a pre-meeting meeting for another meeting. The other is a regularly scheduled get-together with standard procedures and announcements. This basically describes the difference between European attempts to address problems and that of the U.S., and it illustrates why the U.S. response has been both more organized and more effective.

Yesterday, I shared my view that the European situation will probably be resolved, and the eurozone preserved, as the alternative could be a return to the conflicts that ripped the continent apart in the last century. The Greek elections were the latest crisis flash point, opening up the possibility of electing Syriza, a party that had pledged to reject the painfully negotiated bailout package.

I hope all you fathers out there had a great day. I had a wonderful time playing with my son, Jackson, who is 4 years old. We brought him home from Viet Nam about three and a half years ago, and he is a great kid.

There was more in the papers today about Europe, as the situation continues to evolve amid lots of hand-wringing about what can be done to save the region. The problem is not going away. We are facing a continuing series of what will be perceived as crises—a “hurricane season”—that will result from each country’s decision about whether to remain in the eurozone, and give up much or all of its budgetary and fiscal sovereignty, or go independent. Some, like Greece, might not end up with the luxury of being able to make the decision for themselves.

Right now, we are seeing Hurricane Spain, which will be followed shortly by others. The UK is putting flood walls in place—to extend the metaphor—and reports are that central banks around the world are readying rescue operations in case the Greek elections result in even more political and financial turmoil. What we have learned at this point is that volatility will certainly continue.

The pain in Spain continues, with yields hitting a euro-area high of 6.8 percent—very close to what is widely viewed as the 7-percent red line that would compel a bailout. Intra-European political debates about how best to handle the situation are ongoing, with non-Germans demanding that Germany pay and Germany, understandably, looking for other options.

I don’t want to talk about that today, though, for a couple of reasons. First, because we already discussed it for the past two days and nothing material has changed. And second, because there is some U.S. economic news that warrants discussion.

As promised two days ago, today we have more on Europe and China. The Spain situation continues to evolve, and the markets gave a resounding vote of no confidence on the bank rescue. After first rallying, equity markets either ended flat or down. Spain’s 10-year bond yields climbed to almost 6.5 percent and Italy’s to more than 6 percent.

The fallout went beyond the financial markets. Cyprus became the fifth European nation to seek a bailout, and China stepped up its stimulus by encouraging banks to lend more. The president of the European Commission called for all 27 countries to submit to common banking supervision and regulation. The front page of New York Times included an article titled “Worry for Italy Quickly Replaces Relief for Spain.”

The headlines this morning are all about the Spanish banking system rescue, with front-page, top-of-the-fold articles in the Financial Times, the Wall Street Journal, and the New York Times.