Category Archives: Doomsday scenarios

Budget Brinksmanship: American Exceptionalism Gone Bad

Being exceptional apparently means never having take responsiblity for your actions.

Democrats and Republicans Pedal to the Metal in Debt Ceiling/Shutdown Game of Chicken

You know it’s bad when Grover Norquist is playing elder statesman.

Joe Firestone: Stop “the Great Betrayal” – Kabuki Update

It now looks like the big media and leaders in both parties are no longer focusing on the Government Shutdown crisis, but are now moving on to the notion that the shutdown is melding with the upcoming probable breaching of the debt limit to create a combined mother of all fiscal crises. Don’t be fooled.

How the Eurozone Might End

Yves here. This post by Yanis Varoufakis gives a plausible scenario as to how the Eurozone could unravel. Most commentators believe the country that is most likely to rupture it is Italy. Italy has a primary budget surplus and also has a high saving rate, with the result that even under the gold-standard-like Eurozone, it still funds most of its debt issuance internally. Notice how quickly the Eurozone could fracture once one country exits.

Yanis Varoufakis: What Merkel’s Third Term Means for Europe

Yves here. Varoufakis gives a high-level overview of the political and economic constraints on Merkel in dealing with the festering Eurocrisis. While many of the political issues have received decent coverage in the English language press, the nature and severity of Germany’s economic challenges have gotten scant notice.

Gaius Publius: Climate Crisis: Why We’re on Track for 7°C Warming or Greater by 2100

If we don’t “stop now” — meaning, hit the carbon brake hard and stop the carbon car — we risk going over a cliff whose edge could be as near as five to ten years away.

Mathew D. Rose: Good News for Merkel is Not Necessarily Good News for Europe

The German word for election, Wahlen, comes from the word “choice”, and in this general election there wasn’t really one. And that’s too bad for the rest of Europe.

China’s Ultimate Debt Holders—Not the Borrowers

In China, things are not looking pretty.

Robert Prasch: The “Lessons” that Wall Street, Treasury, and the White House Need You to Believe About the Lehman Collapse

Five long years have passed since the demise of the once venerable firm of Lehman Brothers. To mark the occasion, Wall Street, the United States Treasury Department, the White House, and their several political proxies and spokespersons have taken to the mass media to instruct the public in the “lessons” to be drawn from the financial crisis of 2007-09. Regrettably, we are witnessing the propagation of several self-serving falsehoods in the hope that the public can be induced to embrace them now that the immediacy of the events in question is in the past. Some of the lessons are so flagrantly false that they demand immediate correction.

What the Orgy of “Lehman Five Years On” Stories Missed

One of the reasons I haven’t weighed in with the obligatory Lehman five year anniversary piece is that so many of them are variations on a limited range of themes. So it may be more instructive to discuss the stories that it would have been nice to see instead.

Yanis Varoufakis: Why Asymmetrical Monetary Unions Are Bound to Fail

Yves here. This post may strike some readers as a bit wonky and a bit too well-fitted to the woes of the Eurozone. Varoufakis argues that it has broader applicability. And consider: our Richard Smith has speculated that the US civil war was really the result of a strained currency union. I’m not terribly knowledgeable about the economics of 19th century America (I studied England and France during that period instead) but on a first pass, Varoufakis’ ideas appear to have some relevance for that period as well.

James Galbraith, Neil Barofsky, and John Coffee Discuss Lessons from Lehman Meltdown

I have to confess that given the length of this panel discussion presented by Better Markets, I’ve looked only at the start, which is quite promising. Given the caliber of the participants, I’m hoping to get to it over the weekend, since it will be a departure from the bromides the MSM seems to be serving up on this anniversary of the Lehman collapse. This talk is oriented towards a discerning audience and offer more insider detail.

Why You Should Learn to Love the Brave New World of Low Liquidity

The Financial Times reported earlier this week (hat tip Scott) how banks are cutting the size of corporate bond trading desks and reducing the size of trading inventories, all as a result of big bad regulations. As a result, the banks would like us to know, investors might be hurt by a lack of liquidity! Horrors!

Ilargi: No Vigilantes Or Vultures Need Apply

With media and technology becoming faster and more pervasive at a rapid clip, it shouldn’t perhaps be a big surprise to see the ease with which war-mongering news flashes come to dominate the story of the day. But maybe this should be received with an increasing dose of skepticism…