Archive - Apr 22, 2010 - Blog entry

Multiple choice time.

Forget the economists ... call in the criminologists.

As the herpe of sovereign default continues to flare across Europe, Jürgen Stark of the ECB paints a refreshingly honest portrait of the horizon: "we may already have entered into the next phase of the crisis: a sovereign debt crisis." The sum of 'Taking stock: where do we stand in the crisis?' in four lines: while continental Europe is a deformed cripple; the US, UK and Japan are each morbidly obese, wart-ridden trolls; it's last call and everyone's drunk; so who do you want to lay with?

Interest rate derivatives certainly help many individual businesses control and hedge their costs.

But when a bunch of individuals all attempt to reduce their risks at the same time in the same way, it can increase the risk to the overall system.

As I warned, Greece is ever closer to default (a default that is damn near guaranteed) while Ireland is probably in worse shape!!! Financial contagion begets economic contagion which breeds more financial contagion...

Christina Romer, chair of the president’s Council of Economic Advisers, is channeling J.M. Keynes. She stubbornly sticks to the Keynes Manifesto. In fact you could say that Keynes is Obama's chief economic advisor. These are the people who got us into this mess and we ask them to lead us out?