Breezhnev: Regarding systemic collapse: Not says me, so says the catastrophic near miss we had in 1998 with LTCM. Read Lowenstein’s book “When Genius Failed” and then let’s discuss what a disorderly unwinding would look like and in the midst of a global recession.
This is exactly what I posted before: You throw terms about very cavalierly and without thought as what, “Well, they’re just contracts, let’s tear ’em up!” or “Hell, let’s just let the banking system collapse” really mean. Have you thought either of those ideas through? I mean, seriously, what do you think would happen if the banking system did collapse?
And I’d be a little wary of what some Joe Stiglitz disciple at IMF is saying. Do a little research on Joe and his views and, more importantly, his resume and experiences and then we can talk about how truly objective he is. No, I’m not saying that Paulson or Geithner or Rubin are any better. To the contrary. No one and I mean no one in this has clean skirts. However, and as I opined earlier: Screaming and yelling sure as shit ain’t gonna solve this mess. As for what some financial planner at Sitka Pacific has to say (Shedlock): Yes, he’s knowledgeable and an interesting read, but hardly an authority. We can debate Keynesianism versus Monetarism or discuss von Mises and Rothbard, but what the fuck difference does that make RIGHT NOW?
You want to debate using facts? I’m all for that. I can categorically state and using historical precedent (LTCM, 1998) that a disorderly unwinding of some of the significant portfolios and positions held by “too big to fail” players would trigger a systemic collapse. We were on the verge in 1998 and LTCM was nothing compared to some of these behemoths and the staggering size of their portfolios.
Again, it’s a distinction without difference and there are much bigger issues right in front of us.
