Saturday, August 13, 2011
Economic double trouble
Here’s a great description about how 2008 ultimately led to recent market turmoil, including entire nations teetering on the edge of default:
Here’s a great description about how 2008 ultimately led to recent market turmoil, including entire nations teetering on the edge of default:
“Unsustainable private-sector debt mountains were transferred to the public sector in 2008 to prevent the adjustment to the Depression-era reality that the debt unwind would undoubtedly have brought about,” Mr Edwards (of Société Générale) wrote in his latest research note. “Yet, those debts are as unsustainable in the hands of the public sector as they were in the private.”Makes sense. I'd go a step farther: A borrower hands off his unsustainable debts to another borrower barely able to keep up with his own unsustainable debts. The result: double trouble.
