The financial crisis in Europe has "entered a potentially disastrous phase," the New Yorker reports, with "dire consequences" predicted for the entire world—even America!—if the European governments don't take swift action. The Organization for Economic Cooperation and Development [OECD] released a report today warning that the euro crisis is "a key risk to the world economy," and the "contagion" could destroy even the pitiful economic recovery we've experienced here since the Great Recession officially began in December 2007. Here's a fun video about how we're all potentially doomed:

Moody’s Investors Service also issued a bleak report on Europe’s rapidly escalating sovereign debt crisis this morning, speculating that multiple countries could default on their debts or even abandon the euro altogether. "We are concerned that policy-makers fail to see the urgency of taking decisive action to tackle the real and growing risks to the global economy," the OECD.’s chief economist Pier Carlo Padoan said in a statement. "We see the US growth recovering only slowly, the euro area entering into mild recession and Japan growing faster because of reconstruction, but this boost is temporary and will fade away."

New Yorker financial writer James Surowieck is suitably alarmed, but he also says the crisis is far from intractable. "What’s easy to miss, amid the market tremors and the political brinksmanship," Surowieck writes, "Is that this is that rarest of problems—one that you really can solve just by throwing money at it... Italy’s fiscal situation is not good, but it’s not much worse than it was a decade ago. Indeed, it’s one of only a small handful of countries in the developed world that are running a so-called primary surplus: that is, if you exclude interest payments on its debt, it actually takes in more in tax revenue than it spends. The problem, then, isn’t the debt itself but, rather, the soaring interest rates, and these are driven more by fear than by economic fundamentals."

The impact of all this grim news on the stock market? This morning, the Times reports, stocks "rose sharply in Europe and Asia for the first time in more than a week, and the euro strengthened, on hopes that European leaders were working on a new approach to resolve the crisis." Down is the new up!