Steve Keen On Parasitic Bankers, Deluded Economists, and Why “We Are Already In The Second Great Depression”

Tyler Durden's picture

Everything that 'deluded' orthodox economists have done so far has been designed to aid the creditors (who remain the problem) while Steve Keen, the most familiar face of the non-orthodox economists, sees the only solution to this crisis as aiding the debtors. His interview with BBC’s HardTalk this week covers a great deal of ground from modern debt jubilees (and how they should be structured), the Tea-Party and Occupy movements (and his growing fear of historically repeating the endgames of previous economic and social disenfranchisements), and the parasitic nature of our existing financial sector.

He is unequivocal on the outcome of the status quo, as he has been for many years, citing politicians as reactors not leaders with the view that the youth movements we are seeing will force change of leadership to enable non-orthodox solutions to our simple problem – too much private debt. “Write off the private debts, nationalize the banking system, and start all over again” is his starting point but his ideas on implementation warrant some attention as he attempts to promote creative instability and reduce the destructive instabilities of capitalism – recognizing that our world is not in equilibrium as every Keynesian economist would believe but inherently cyclical and unstable.


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dragoneyes74's picture

What a ridiculous solution.  The whole reason we're in this mess is because we've imposed ideas on the free market.  I wish Nike would come out with a new campaign for politicians called: Just Do NOTHING.  

The free market will fix it.  Please stop solving things.   

eblair's picture

Except we don't have a "free market".

williambanzai7's picture

Well, he's right about one thing, the financial sector has failed.

Jubilee won't seem so radical once we see collapse.

eblair's picture

Tyler, please lose the up and down arrows.  They are so not fight club.  They are more like facebook pussy club.

Sean7k's picture

Steve Keen is a neokeynsian, therefore we are visited by the studders and shudders and inability to provide the answers to who gets the haircuts. He still wants "good debt" versus bad debt and settles on a figure. 

We have to start with EVERYTHING Keynes said is wrong. 

Eliminate legal tender laws. Eliminate State Capitalism. Destroy the military-industrial complex. Eliminate executive rule making and presidential directives with the force of law. 

Or, just go back to using the Constitution.

Social contracts need to evolve past the use of government as a moderator.

Banjo's picture

Sean 7k: Your knowledge of Keynes is not wholly accurate. Not everything Keynes said was wrong at all.


In fact Keynes said that in good times the government should save money. I don't belive there has been any one year in boom times where a cent was put away for a rainy day. Nope people just want more and more and more, spend spend spend.


The chickens are coming home and it's not Keynes I would be blaming it's a lazy public that think it's entitled to constant free lunches with double helpings of corn bread and gravy all without work.



Sean7k's picture

Try "The Failure of the New Economics" by Hazlitt. A point by point deconstruction of Keynes. Further, Keynes knew governments would never pay down debt in good times. He was a proponent of debt creation. 

Don't buy the econ 101 propaganda.

blindman's picture
Solomon's Temple - Prt24(CFR)
Copyright © 1971 by Gary Allen
with Larry Abraham
ISBN: 0899666612
" J. P. Morgan created artificial panic used as excuse to pass Federal Reserve Act Morgan
was instrumental in pushing U. S. into WWI to protect his loans to British government.
He financed Socialist groups to create an all-powerful centralized government which
international bankers would control at the apex from behind the scenes. After his death,
his partners helped finance the Bolshevik Revolution in Russia.
And, curiously enough, the Federal Reserve System has never been audited and has
firmly resisted all attempts by House Banking Committee Chairman Wright Patman to
have it audited. (N. Y. Times, Sept.14, 1967.)
How successful has the Federal Reserve System been? It depends on your point of view.
Since Woodrow Wilson took his oath of office, the national debt has risen from $1 billion
to $455 billion The total amount of interest paid since then to the international bankers
holding that debt is staggering, with interest having become the third largest item in the
federal budget. Interest on the national debt is now $22 billion every year, and climbing
steeply as inflation pushes up the interest rate on government bonds. Meanwhile, our gold
is mortgaged to European central banks, and our silver has all been sold. With economic
catastrophe imminent, only a blind disciple of the "accidental theory of history" could
believe that all of this has occurred by coincidence.
When the Federal Reserve System was foisted on an unsuspecting American public, there
were absolute guarantees that there would be no more boom and bust economic cycles.
The men who, behind the scenes, were pushing the central bank concept for the
international bankers faithfully promised that from then on there would be only steady
growth and perpetual prosperity. However, Congressman Charies A. Lindberg Sr.
accurately proclaimed:
"From now on depressions will be scientifically created."
Using a central bank to create alternate periods of inflation and deflation, and thus
whipsawing the public for vast profits, had been worked out by the international bankers
to an exact science.
Having built the Federal Reserve as a tool to consolidate and control wealth, the
international bankers were now ready to make a major killing. Between 1923 and 1929,
the Federal Reserve expanded (inflated) the money supply by sixty-two percent. Much of
this new money was used to bid the stock market up to dizzying heights.
At the same time that enormous amounts of credit money were being made available, the
mass media began to ballyhoo tales of the instant riches to be made in the stock market.
According to Ferdinand Lundberg:
"For profits to be made on these funds the public had to be induced to
speculate, and it was so induced by misleading newspaper accounts, many
of them bought and paid for by the brokers that operated the pools…"
The House Hearings on Stabilization of the Purchasing Power of the Dollar disclosed
evidence in 1928 that the Federal Reserve Board was working closely with the heads of
European central banks. The Committee warned that a major crash had been planned in
1927. At a secret luncheon of the Federal Reserve Board and heads of the European
central banks, the committee warned, the international bankers were tightening the noose.
Montagu Norman, Governor of the Bank of England, came to Washington on February 6,
1929, to confer with Andrew Mellon, Secretary of the Treasury. On November 11, 1927,
the Wall Street Journal described Mr. Norman as "the currency dictator of Europe."
Professor Carroll Quigley notes that Norman, a close confidant of J. P. Morgan, admitted:
"I hold the hegemony of the world." Immediately after this mysterious visit, the Federal
Reserve Board reversed its easy-money policy and began raising the discount rate. The
balloon which had been inflated constantly for nearly seven years was about to be
On October 24, the feathers hit the fan. Writing in The United States' Unresolved
Monetary and Political Problems, William Bryan describes what happened:
"When everything was ready, the New York financiers started calling 24
hour broker call loans. This meant that the stockbrokers and the customers
had to dump their stock on the market in order to pay the loans. This
naturally collapsed the stock market and brought a banking collapse all
over the country because the banks not owned by the oligarchy were
heavily involved in broker call claims at this time, and bank runs soon
exhausted their coin and currency and they had to close. The Federal
Reserve System would not come to their aid, although they were
instructed under the law to maintain an elastic currency."
The investing public, including most stock brokers and bankers, took a horrendous blow
in the crash, but not the insiders. They were either out of the market or had sold "short"
so that they made enormous profits as the Dow Jones plummeted. For those who knew
the score, a comment by Paul Warburg had provided the warning to sell. That signal
came on March 9, 1929, when the Financial Chronical quoted Warburg as giving this
sound advice:
"If orgies of unrestricted speculation are permitted to spread too far . the
ultimate collapse is certain … to bring about a general depression
involving the whole country."
Sharpies were later able to buy back these stocks at a ninety percent discount from their
former highs.
To think that the scientifically engineered Crash of '29 was an accident or the result of
stupidity defies all logic. The international bankers who promoted the inflationary
policies and pushed the propaganda which pumped up the stock market represented too
many generations of accumulated expertise to have blundered into "the great depression."
Congressman Louis McFadden, Chairman of the House Banking and Currency
Committee, commented:
"It [the depression] was not accidental. It was a carefully contrived
occurrence… The international bankers sought to bring about a condition
of despair here so that they might emerge as the rulers of us all."
Although we have not had another depression of the magnitude of that which followed
1929, we have since suffered regular recessions. Each of these has followed a period in
which the Federal Reserve tromped down hard on the money accelerator and then
slammed on the brakes. Since 1929 the following recessions have been created by such
manipulation: ...."

twotraps's picture

excellent post.  Does anyone think that these historical facts have escaped Bernanke?  Could he have overlooked this one episode along the way to becomming an Expert on the depresssion.  Yes, I think they are 'carefully contriving' their sorry-asses off right now, again figuring out how to make it look good when the clean up again....should the mkt take a turn for the worse, of course.  Seriously, anyone that doubts the info in your post is seriously deluding themselves and their economic situation.

eblair's picture

And I'll lay anybody 2-1 the bitch cheats on her taxes.

Hober Mallow's picture

Can't comment on that one, but I can make a 3-1 bet that the cunt has not been shagged in a year

SDRII's picture

his problem like most in the anglosphere is that he is thinking about a solution to restart the old engine. The rest of world are instead focused on what comes next. System reboot may be the most presumptive proposition yet 

twotraps's picture

The Banks will wait and game the holy shit out the New Modern Debt Jubilee......that is what we do now, we game the system.  Fuck business school or even quant programming, the real Wealth is gaming the system.  Bend it, twist it, cry and whine for new exceptions on top of your current banquet of business exceptions and Voila, profitability.  Could be a great reason for the suspended markets lately, waiting for the Gamers to figure out how to benefit.

Banjo's picture

Steve Keen's solution would work if combined with regulating bank's in not allowing people to borrow as much. (set the amount you can borrow at a percentage of what you earn say 100% for example you could model other ratios) Lets work through a simple example three people A,B,C all have $50,000 pa income


A: has net debt of $300,000

B: has net debt of $55,000

C: has no debt


The government prints money and instead of giving it to banks it gives it to the people. Each person gets $20,000


A: must use all this $20,000 to reduce their nett debt to $280,000

B: must use at least $5,000 to reduce their nett debt to 100% of their income which is the maximum in this example

C: can choose to save the additional $20,000 or they may go out and borrow up to a maximum of $50,000



css1971's picture

Read up on fractional reserve banking, the feature you are looking for is the "reserve ratio".


QQQBall's picture


C. revised- must use for consumption, becuase living below your means, savings and investing is to be discouraged. In fact, the $20,000 must be used as a down payment on a $70,000 asset so that you will then owe $50,000 in debt. 


Is it REALLY so f00king hard to mark shit to market and let failures fail? Is it? Stop the f00king madness!

Hober Mallow's picture

Listen to the wanker @ 11:35: "households did not make the bad decisions, the bad decisions were made by the bankers who lent them". The underage society at its best.

SgtShaftoe's picture

Keen is pretty bold and idiotic to lump the austrians with the socialists and himself.. We, the Austrians won the day, at least in being right in the 1940s. He'd do well to go read some Mises and Hayek. His plan of dumping money on the masses, though attractive, cause I'll by gold with it, will only serve to exponentially increase further the inflation rate. Better go sharpen your pencil.

brian.long's picture

Please read his blog or books before reacting. He is extremely well versed in the Austrian School and fully understands its strengths AND weaknesses. His economic modeling work is must-read for anyone who seriously studies economics.

spooz's picture

One variation I have heard is to give everybody cash, with the provision that those with debt need to use it to pay down debt.  That way there will be no ill will towards the freeloaders and the thrifty can be rewarded.  It would only work if the TOO BIGS were wound down first.  Wouldn't want the debt payoff to go for corrupt banksters' collateral grabs.

Baptiste Say's picture

No ill will if you triple money supply to print up $20000 for each person, bail out failures and throw a token bribe to the thrifty (whilst you meanwhile cut the real value of their hard accumulared savings by a factor of three or more)?

Are you an idiot?

WTF is it with all the amateur central planners? This isn't oe Paul Krugman's blog.

Any return to growth isn't going to come from crazy new financial WMDs that simply reward and reinforce reckless behaviour, it'll come from liquidating malinvestments, reorganising failed companies and letting entrepreneurs get back to work maximising value of their assets.

AndrewCostello's picture

Steve Keen is a great economist and I really enjoyed his book (one of the best I've ever read), but I believe he is placing too much blame on creditors.  A loan is a two way transaction, and borrowers should know what they are getting into and act responsibly.


If you want to lay blame 50:50, that's fine - but we should not be lionizing people who earn $30,000 a year and borrowed half a million dollars without even reading their contract.  Nor should we cancel any credit card debts when the people who spent it knew exactly what they were doing, but just didn't care.


Join us:

css1971's picture

95% of the money which everyone thinks they have is debt based. So... People should make decisions based on the 5% of money which is not debt based? Really? You are not going to buy that 20k car because it's really only worth 1k.

People have no choice to take on debt. Everything has inflated to the point where you have to take on debt to buy things you could previously buy with some savings.


GoodMorningMr.VanRumpoy...'s picture

Where did you get that 95% statistic from?

honestann's picture

Almost correct.  A few of us decided to live honest and frugal and never borrow one red cent.  We have been prudent, and royally screwed for being so, because we must pay massively inflated prices that are only possible due to the hyper-debt society.

But yeah, if you want to "compete with the Jones", you gotta get in debt.

The ONLY real solution is to exclusively limit money to being physical gold... period.  No gold certificates, no receipts, just physical gold coins.  This doesn't mean you can't have a bank hold your gold.  This doesn't mean you can't have a debit card attached to your gold.  This only means NO money exists or can be spent except the real, physical gold.  And most important of all, every form of fractional reserve practices must end.

No more ponzi schemes!

juujuuuujj's picture

People go into debt for a plethora of reasons. Your "irresponsible borrower" example is a gross simplification of a very complex process, starting from TV ads, social stigma, health, social problems and ending in global politics and finance.

Debt slavery is a natural outcome of lending - not because people are dummies, but because they're molded by their environment. If as a baby, you grew up in the same environment, with the same social stigma as a debt slave, you'd be a debt slave. And you'd be pissed as hell when someone more fortunate than you started explaining how irresponsible you were.

Old Poor Richard's picture

Whether a borrower has been irresponsible or not, he or she should be forced to pay back that debt unless they are completely unable to do so, in that case they should seek relief in bankruptcy court.  There should be no easy or free way to get out from under debt.  Debt slavery is like catching an STD, you are a willing victim.  Many of us have no debt and are constantly punished by inflation caused by the debt-ridden society.



QQQBall's picture

So we give money, literally give money to the imprudent debtor to pay the imprudent creditor. And that is not unfair to the prudent because "the system failed." Follow the money ---- where does it end up? Bailing out the bank.  The guy who did the liar loan gets a free house and the bank is made whole... Yeah, you are right, that is way to complicated to 'splain.


Hey Steve - if the system failed, why don't I amongst many others NOT need a bailout? The system is failing me by continuing to float the turd homemoaners and banksters, by insisting that the gov't hand out money to try and maintain GDP growth and credit expansion. BTW, gov't borrowing is CREDIT EXPANSION.


Here is the blueprint. If you are insolvent, your assets are used to pay off creditors. If the loan is non-recourse, you walk, the asset gets repriced to market and is sold to a solvent buyer.


The failed logic is that b/c Steve Keen, like alot of us, saw the trainwreck coming, that he is magically able to fix the problem. Wrong.  Print and handout money to some people- seriously?

honestann's picture

Keen is a smart cookie and says lots of smart things.  But the only way to EVER have a creative, constructive, productive system is to eliminate fiat money and ALL fractional reserve practices.  Unfortunately, he tries to create an artificial scheme, which might work for a while, but still contains the fundamental problems that will again lead to the same problems.  The predators-that-be and predator-class must have NO WAY to manipulate the system.  And the only system that does that is ONLY PHYSICAL gold as money, and NO fractional reserve practices whatsoever.  And no central banks, since only gold is money.

realitybiter's picture

We need a giant power on reset.

Jubilee, sort of.  You can get out of the debt, but you are given a NPV for your situation.

Underwater on your house?  Walk away, stick it to the bank, and maybe you can work it out with the future owner to rent it.  But there is no BK credit penalty.

Own your house free and clear?  Still do.

All public entitlements? Everyone gets NPV.  If you have paid into it, you get credit for exactly what you have contributed plus all real returns...  Your public pensions will likely equal about twice your total contribution.

  If are simply a net taker, you get zero of the old system and something from the new system.

All debts will be wiped out and we start anew.

Or something along those lines.   You can't just hand over deeds to people that have paid very little into their homes.  You also can't stick it to everyone to pay the debts of public entitlements.  All defined benefit plans are debts....with some assets towards those debts.


This will never happen as the honesty is too much.  So, we will just inflate the debts away to a jubilee sort of, entitlements will be worthless, and the economy will freak out trying to deal with the distortion in prices.


Oh, Keen is a moron

Ag1761's picture

What side of the fence does he lie! on?

Is he fronting what will be touted and laid in front of the starving sheep as the slow controlled crash starts to hit home and in return for us nice central banking type guys clearing all your personal debt you give us sovereign control, we take your Country's gold and you answer to the NWO single government with a new gold backed (because we have it all) money system.


Is he one of the Tylers?

Fix It Again Timmy's picture

How do you pay off sovereign debt?  By collecting taxes.  But nearly 50% of Americans don't pay taxes and the national debt is expanding by rates never before seen.  One pays taxes by having a job, more and more people are losing their jobs.  It simply comes down to the fact that sovereign debt is rapidly expanding while the taxes to pay down that debt are dwindling.  Our ship of state is loaded down with debt to the point that the water is up to the gunwales and unfunded liabilities have yet to board, can you see where we're going?  The only solution that is being tendered is simply to keep on keeping on......Oh shit!

QQQBall's picture


Yes a jubilee for those poor borrowers that bought a house in the 1960's in Cali for $40k and eventually borrowed $600k against it.... The govt should create money thereby devaluing my savings and give it to the homemoaner so they can have a free house and the bank can balance their books... In fact, they will have all the set-aside loan loss reserves they don't need to pay out in bonuses.


Is this a great country or what? Only the prudent minority loses

Fake Jim Quinn's picture

We've really gotten to the point where the grasshopper calls the police to kill the ants and take their food. Up next: fast and convulsive wins the race

miker's picture

Keen is actually quite brilliant. His concept of a structrued debt jubilee makes sense when you compare it against what is likely going to happen. 

Here's how it would work in the private sector:  Give each household $100K.  Not individuals, but households (even that will require a mountain of lawyers to define).  That would cost the US $15Trillion (borrowed).

So people that are underwater now are likely to be not so and can refinance and move forward.

Those that have been fiscally prudent also get the money.

The downside is of course 15T more in US Goverenment debt; however, we're going to accululate that and much more in 20 years time is you believe we're in a deepining depression, as I do.  By expunging the debt now, you have half a chance of getting the economy growing and paying down that 15T in debt.  NOW, of course lots of other things need to be done to make this work.  The tax system would have to be overhaulded, US spending would have to be systematically reduced in smart ways.  Etc, etc.  But it does have a chance of working if all the parts could come together.

Instead, what is going to happen is decades of muddling along, growing government deficits, no jobs for the youth, and on and on.


Old Poor Richard's picture

At least your scheme recognizes the unfairness to those who aren't in debt with these ridiculous forgiveness schemes.  I'll buy your idea before debt forgiveness. 

But a better plan is to simply restore our earlier bankruptcy laws, let banks eat the loss from reckless lending, get the government out of the picture.  Restore capitalism.

proLiberty's picture

God commanded two different debt jubilees, one on a 7 year cycle and one on a 50 year cycle.  My study of Austrian economics and the economic system outlined in Torah lead me to understand the great wisdom behind these commands for debt limitation. 

In all monetary systems, there is tremendousl pressure to keep the value of the monetary unit constant.  With all due respect to von Mises, Rothbard, etc, I would propose something that is built upon their ideas and not really contrary to them: that when the economy has a lot of long term debt contracts, and especially where the major long-term borrower is government itself, there will be attempts to forbid the monetary unit from changing value. 

Imagine the economic damage that would be done should government attempt to hold the value of any large component, like gasoline, constant over a period of years.  It would be sheer folly and utterly destructive.  That is exactly what happens when government attempts to hold the value of its money constant. 

In an economy, even one that uses precious metals, the money must be allowed to be free to respond to how the market values it over time.  And the major forces that work to prevent that are government.  An overarching requirement that limits the length of debt contracts has the effect of allowing the value of money to be free of these pressures.


Sukumvir's picture

A broad based jubilee is too radical. Some people should be allowed to walk away from their debts and the assets associated with it. But no mercy for second or third home buyers. The cost of the write down or write off of speculative housing should be borne by the debtors and the shareholders of the banks alike.

If he claims that government created money, issued by a national bank should be the way to go forward; then government (via its new printing powers) can always bring on its books a large part of the housing stock; in the context of a bank nationalization/recap program.

That "housing" -new and old- infraestructure can be managed over the course of two decades, just like airports, ports, roads, bridges etc and gradually privatised.

Student loans... if you need to give a lump-sum to anyone that would be students and former students going back two decades...whether they incurred student loans or not...

juujuuuujj's picture

A better solution would be to combine Steve Keen's idea of a debt jubilee (better yet, a total debt jubilee every 10 years) with Michael Hudson's idea of rent tax that would replace income tax. That way:

- the process of a jubilee won't take many years, 10000 page laws and 100000 lawsuits. It's simply a one-time elimination of all private debt.

- people with 10 mansions wouldn't be able to afford keeping them, because they have to pay rent tax

- Because there's no income tax, people would actually keep more of their earnings and be able to service debt in time for the next jubilee. 

Old Poor Richard's picture

Not everyone is in debt up to their eyeballs.  Those of us with positive net worth and no outstanding debt would be royally fucked.

We simply need to restore our older bankruptcy laws: no debt forgiveness (!!!), but ability to walk away from unsecured debt while facing the consequences. 


Old Poor Richard's picture

No one should be able to walk away from debt, except in bankruptcy court. 

fpscod9's picture

,,,When is this policy gonna be implemented, I AM BUYING 10 MANSIONS, JUST BEFORE IT IS IMPLEMENTED :  )))

zippy_uk's picture

I think a lot of the bloggers here miss the point:

Too much credit has screwed the system - or as Keen puts it "bankers over extended credit". To do this they junked credit assessments and created vodoo insurance products to shift risk of their balance sheet (and still they screwed themselves). Why pay 5/6 times salary for a house which historically should only be worth 2.5 times - what changed ? (And don't say there is more population - thats solved by building more houses). Buying cars or boats on credit may be one thing, but everybody, particularly those who wish to start families need somewhere to live. Something bankers counted on when the pitched in for all this mortgage madness.

I agree that his solutions for effecting Debt Jubilee are a bit sketchy, but the central point about credit, and removing debt from the system is key. Everytime we over pay for housing, or services or other phyiscal assets, or have to pay huge taxes to cover government debts we LOSE COMPETITIVENESS especially with China. I think personally the debt jubilee takes place through inflation so government policies in the western world are largely in place. However this is a key topic requiring a serious debate.

I wish some of (seemingly US) bloggers could see the bigger picture. THe US has the absolute largest stock of debt - so has most to gain from a debt jubilee. If we ant to get out of this mess we need to look at the longer term view on this one.

Baptiste Say's picture

Your jubilee simply redistributes real wealth from the prudent and thrifty to the reckless and wasteful, it destroys capital of the former and takes away obligations of the latter without penalty (unlike bk).

It does nothing to change bad behaviours which lead to such malinvestment and it guarantees years of massive inflation that will take capital formation back decades.

linrom's picture

You might want to read "Debt: the first 5000 years." Your understating of economics is at best naive." If everyone was to eliminate debt and wasteful spending, your job would probably be classified as "dumpster diving."

zippy_uk's picture

So what you are saying is that it would be a travesty if wealth was transferred from the prudent and thrifty (Goldman Sachs, JP Morgan, etc. and associated individuals - George Soros, and others) to wicked and reckless ordinary working people who are getting in to debt because they are seeing jobs and wages disappear while prices and assets like houses have got over inflated in value ? If this is you please say so.

Real economies produce real things for real people. Badly performing economies are ones where the majority of people are poor so there is no demand for goods and services which in turn prevents job creation, working and ultimately saving to provide more capital for industry. Just a few hyper rich people at the top who can afford to buy the new boad 3 times bigger than the old one.

Once you have had a debt jubilee, interest rates can rise again, tough money (perhaps backed by a gold standard) can be introduced safely and the market will retain memory of what happend and for who and restrict or charge for credit accordingly. As most of the assets get put back into the hands of most people, the savings rate will recover quickly because there are always more savers than borrowers (I think it a factor of 1 to 10 on average). Of couse, when you are stuck in a debt depression saving is much harder and no one wants to lend so the economy stalls.


deflator's picture

Not a big fan of controlled collapses because it guarantees the worst case scenario. I have warmed to the big government solutions crowd somewhat over the years because I am sure that is what we will get. Why waste energy on "sound money", "free market" ideas when there is zero chance of any being implemented?

 "Debt Jubilee" idea has been around for quite awhile(more than 10 years that I know of) amongst some in the "big government" solution to peak oil camp.

Temporalist's picture

"The Merchant of Gloom" 707 (lol)!!!


Yea the people that tell you your house is on fire and that the basement is as deadly as the attic are GLOOMERS!


Like Kyle Bass points out, a sort-of debt jubilee (debt "restructuring") is what Greece is looking at, and what will stop them from defaulting again when their "punishment" is to reinforce that they don't have to pay the debt back in the first place!

tumblemore's picture

The Greeks could never have borrowed as much as they have without membership of the euro and the implied backstop of Germany behind them. The banks could never have expanded credit so recklessly and ended up so totally bankrupt without their prior regulatory capture of congress. The political and business elite have fucked us all while we were enjoying the post-war prosperity and not paying attention.