Diary

Canary in the Coal Mine?

    After two years of trying to decipher credit default swaps, derivatives and other esoteric financial instruments I’ve come to this conclusion: the world economy is in big trouble. Instead of letting all the firms that created the madness die deserved deaths, all we have done is defer the inevitable pain by transferring the problem into the laps of sovereign governments, and when they go belly up, who’s going to backstop them?

      Case in point: Greece. Goldman Sachs brought the country to its knees while simultaneously betting against the very instruments it sold them. Next stop Spain, then… 

      The world is facing a serious debt crisis. I hope enough people wake up in time to see the danger and vote people into office who will act in a fiscally responsible manner instead of kicking the can down the road because if something isn’t done the road will begin to look like the one in the Cormac McCarthy novel.

       A few people saw this coming: Mort Zuckerman and Nouriel Rabini to name two. The current government establishment has shown itself incapable of dealing with the issue.  Our only hope is if the Republican Party embraces the call for fiscal sanity of the Tea Party Movement and fields candidates this November who “get it”.

      We can’t wait until 2012, it has to start happening this year.