DOOM: I know an ending when it comes

Remember way back when the whole point of the American Experiment was supposed to be that class and rank didn’t matter any more? That any person, regardless of birth or circumstances, could rise as high as talent and motivation could take him? (There is a ton of good stuff in Insty’s post on this topic -- read all the links.)

Bankrupt a state; move on to high-paid job at a financial-sector firm. Bankrupt financial-sector firm; collect $12 million in severance pay. I’m in the wrong line of work. Also, how interesting: MF Global’s seventh-largest creditor is...CNBC. [EDIT: Changed 'MSNBC' to 'CNBC'. Thanks to Andy for the heads-up.]

More on Corzine: I guess when you're used to pissing away tens of billions of dollars as the governor as one of the most bankrupt states in the union, losing track of mere hundreds of millions as CEO of a bankrupt financial company must seem like no big deal.

EU Debt Deal a 'Construct of Madoffian Proportions'.

We predict a catastrophic contraction of GDP in Euroland in a combined monetary and real-economy event," he said. "The event we envision is much more akin to the Great Depression of the 1930’s than to any business cycle we have experienced in our lifetimes.

Remember when I said that the half-life of the newest EU bailout would be about two weeks? Well, I was off by a bit: it was about five days.

Note this sentence: “Borrowers who qualify will get payment relief, not debt relief. “ I wonder if students who borrow so improvidently for college would still do it if they knew the indentured servitude it would entail later?

Signs of strain are everywhere. In September the Department of Education reported that in 2009 the default rate, which is defined as non-payment for 270 days, had reached 8.8%. By some estimates delinquency rates, an earlier indicator of stress, for student loans exceed 10%, ten times that for credit cards and car loans. Ms Loonin’s average client has a low-paying job, $30,000 of debt and is in arrears.

Catastrophe bonds.

It seems like it should go without saying, but apparently it doesn’t: the private sector should always grow faster than the government.

One of the canards that public-pension advocates always trot out is that retirees contribute money back into the community after they’ve retired. Well, as this article shows, that’s not always true: quite often the retirees leave the community and spend their pension checks in another city or state. The pension checks keep going out, but the no money from that retiree comes back in.

U.S. Army think tank: “Our nation is boned, gentlemen. Plan accordingly.” (That’s a paraphrase, but close enough.)

Greek debt in 2009: 127% of GDP. Greek debt in 2020 (projected, if the bailout works perfectly): 120% of GDP. Apparently, the Eurozone considers this boffo progress and well worth the expenditure of tens (potentially hundreds) of billions of Euros.

When you’ve never actually held a private-sector job (or have only held one briefly as a stepping-stone to a political career), it stands to reason that you’d be a little unclear on how the whole "jobs" thing works.

The west’s “killer apps” -- basically, the free market, an enlightened approach to discovering the natural world (science and medicine), combined with a hardy work-ethic and a respect for individual rights (the rule of law). But we in the west are busy dismantling all those systems in the name of “fairness” and “equality” -- the welfare state will kill us long before any invader could. Ferguson’s essay is long on prescriptions but woefully short on details, though. Every pundit will bend your ear about ways to “save the Republic”, but precious few could tell you how to get from point A to point B without causing a civil war or complete societal breakdown. When you get right down to it, Americans ten years from now will be the same people they are now, only more so. If we have hidden reserves of strength and character, then hard times will bring that out. If not...we deserve to fail.

UPDATE 1: The EU debt deal is cold comfort to many Greeks. This is the problem with the program of austerity laid out by the rest of Europe for their erstwhile Greek brethren: the citizens may not stand for it, regardless of what the rest of the EU decides.

UPDATE 2: Interesting bit of trivia: MF Global's debt was still rated as "investment grade" when it went bankrupt.

MF Global is the first company in more than three years to default on its bonds while rated investment grade by Standard & Poor's. The last was Washington Mutual Bank in September 2008.

UPDATE 3: Greek government poised to fall? Remember that the Greeks voted the Socialists into power to prevent the austerity program from taking place, not to ram it through. Papandreou's own party may sink the newest 'bailout' before it even gets underway, and take Papandreou with it.

posted by Monty at 08:36 AM

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