Greece is said to have entered a "selective default" yesterday. If you want to read about it, read Felix Salmon or the New York Times.
Have you noticed that nobody seems to know how to run an "advanced economy" without blowing it? (South Korea, Canada, and maybe Germany excepted—but watch out!)
Have you noticed that all the headlines in the "advanced economies" are about debt, debt, and debt? It's all debt all the time. How did everybody in the Western World become obsessed with debt?
debt blah blah deficits blah blah blah austerity blah blah bondholders blah blah blah banks blah blah blah credit crunch blah blah haircuts blah blah blah credit rating downgrades blah blah blah blah bondholders blah blah blah default blah blah blah bailouts blah blah banks blah blah credit bubble blah blah blah haircuts blah blah interest rates blah blah debt ceiling blah blah central banks blah blah blah austerity blah blah the 10-year yield blah blah blah debt rollover blah blah bond spreads blah blah blah credit default swaps blah blah blah blah bailouts blah blah blah deficits blah blah blah 1937 blah blah blah blah blah blah yield curve blah blah contagion blah blah blah debt-based securities blah blah blah zero interest rates blah blah austerity blah blah blah more debt blah blah blah...
...there must be a clear commitment that, whatever else happens, no big financial institution in any country will be allowed to fail
—Larry Summers
Capitalism without failure is like religion without sin
—Allan Meltzer
Does anybody share my sense that things have spun completely out of control?
JP Morgan Chase holds Greek debt. Do you hold any Greek debt? No? Neither do I. JP Morgan Chase holds some of my debt, too. They charge me 14.24% interest on that debt. That's a lot! But not as much as some people pay.
I had to take on a considerable amount of expensive credit card debt when I could no longer work in the software business after the Tech Bubble burst. So, JP Morgan Chase invested in Dave Cohen. I'm a real money-maker for them. Boy, I sure hope I don't let them down the way Greece has!
I also took equity out of my condo to support myself. It was so easy to re-finance! I could borrow money but I didn't have to show any income. Good thing, too, because I didn't have any income. That's why I was re-financing! I didn't want to starve to death. I sold that condo at the top of the Housing Bubble. Lucky me!
Nobody bailed me out then, or in 2008. Nobody bailed you out, either. Neither of us is Too Big To Fail.
I'm having a hard time taking The Humans seriously here. I have some questions.
Why can't The Humans run an honest game?
Why should I give a damn what happens to the big European banks?
Why should I give a damn what happens to the big American banks?
How did The Greeks get so confused about living within their means?
Why should I give a damn about what happens to Greek bondholders?
How did The Humans get so confused about the dangers of letting bankers out of their cages?
How did The Humans come to believe that borrowing money without limit has no consequences?
How did The Humans come to worship John Maynard Keynes?
Why can't The Humans run an "advanced" economy without blowing it?
Why did it not occur to someone that debt-based growth had a limited future?
For that matter, why can't The Humans run a proper Democracy without blowing it?
When, exactly, did our economic life become a joke?
And so on. There's no end to questions like these. Perhaps you have some of your own.
Bonus Video
Dave--
How do you really feel?
Posted by: Ted | 07/22/2011 at 10:57 AM