I wonder how long it will take after Greece defaults for people to figure out that the US is just like Greece but bigger?

Priced in...?

But Gen, when I wake up in the morning with a massive hangover from too much drinking and I take a shot or two of whiskey I feel great. That only serves as proof that the answer to too much drinking is more drinking.

Got to go call my doc, he just left some message about sclerosis or something like that.

A while. Greek default, and subsequent losses in Eurozone, will send more money into USTs, allowing the borrowing / can kicking to go on longer. Sigh...

"I wonder how long it will take after Greece defaults for people to figure out that the US is just like Greece but bigger?"

"The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation"
\
http://en.wikipedia.org/wiki/Normalcy_bi....

We live in a bizarro world because we cling to bizarro currencies. The Greeks have taken to barter. With barter, they trade something of value for something of value. Strangely as they are starved of a bogus currency and denied bogus credit, they are forced back into a real economy.

Sigh.

I'm over it. It's like growing up in the 80's for me, under the threat of nuclear annihilation (I know y'all from the 50's/60's have even more of it, but it's what I know) - there's only so much I can control; so much I can worry about. As much as I'd LIKE to see the Euro-implosion, there's nothing more I can do to speed it up - only prepare on my end.

The ironic part about it is that it's closer akin to living in Japan (until the recent devastating tsunami), or California and worrying about quakes. The longer you go without a big one, the more lax you get, BUT... the more likely it is that the next big one WILL hit.

Nudge me when the actual fireworks starts - by that point it'll be WAY too late to stop the cascade anyway.

Dakine

The full 78 page PDF as download:

http://www.scribd.com/document_downloads....

"Trade-Off": A Study In Global Systemic Collapse

Overview

This study considers the relationship between a global systemic banking, monetary and solvency crisis and its implications for the real-time flow of goods and services in the globalised economy. It outlines how contagion in the financial system could set off semi-autonomous contagion in supply-chains globally, even where buyers and sellers are linked by solvency, sound money and bank intermediation. The cross-contagion between the financial system and trade/production networks is mutually reinforcing.

It is argued that in order to understand systemic risk in the globalised economy, account must be taken of how growing complexity (interconnectedness, interdependence and the speed of processes), the de-localisation of production and concentration within key pillars of the globalised economy have magnified global vulnerability and opened up the possibility of a rapid and large-scale collapse. ‘Collapse’ in this sense means theirreversible loss of socio-economic complexity which fundamentally transforms the nature of the economy. These crucial issues have not been recognised by policy-makers nor are they reflected in economic thinking or modelling.

As the globalised economy has become more complex and ever faster (for example, Just-in-Time logistics), the ability of the real economy to pickup and globally transmit supply-chain failure, and then contagion, has become greater and potentially more devastating in its impacts. In a more complex and interdependent economy, fewer failures are required to transmit cascading failure through socio-economic systems. In addition, we have normalised massive increases in the complex conditionality that underpins modern societies and our welfare. Thus we have problems seeing, never mind planning for such eventualities,while the risk of them occurring has increased significantly. The most powerful primary cause of such an event would be a large-scale financial shock initially centring on some of the most complex and trade central parts of the globalised economy.

The argument that a large-scale and globalised financial-banking-monetary crisis is likely arises from two sources. Firstly, from the outcome and management of credit over-expansion and global imbalances and the growing stresses in the Eurozoneand global banking system. Secondly, from
the manifest risk that we are at a peak in global oil production, and that affordable, real-time production will begin to decline in the next few years. In the latter case, the credit backing of fractional reserve banks, monetary systems and financial assets are fundamentally incompatible
with energy constraints. It is argued that in the coming years there are multiple routes to a large-scale breakdown in the global financial system, comprising systemic banking collapses, monetary system failure, credit and financial asset vaporization. This breakdown, however and whenever it
comes, is likely to be fast and disorderly and could overwhelm society’s ability to respond.

We consider one scenario to give a practical dimension to understanding supply-chain contagion: a break-up of the Euro and an intertwined systemic banking crisis. Simple argument and modelling will point to the likelihood of a food security crisis within days in the directly affected countries and an initially exponential spread of production failures across the world beginning within a week. This will reinforce and spread financial system contagion. It is also argued that the longer the crisis goes on, the greater the likelihood of its irreversibility. This could be in as little as three weeks.

This study draws upon simple ideas drawn from ecology, systems dynamics, and the study of complex networks to frame the discussion of the globalised economy. Real-life events such as United Kingdom fuel blockades (2000) and the Japanese Tsunami (2011) are used to shed light on modern trade vulnerability.

Infidel has it right.

Think of it this way: how long did it take the European jews to figure out that Hitler was going to kill them all during WWII? Answer: when the gas began to come out of the vents of the gas chamber.

I'm in the process of reading the report I linked to above, "Trade-Off": A Study In Global Systemic Collapse, and it is SO good thus far. Reminds me of the first episode of the excellent BBC series by Raymond Burke, "Connections," which I am now taking a break to want once again:

James Burke Connections #1 - The Trigger Effect

http://www.youtube.com/watch?v=WgOp-nz3l....

Gradualism is how you di it. We demand specific programs be instituted. You institute some. We come back and demand more programs be instituted. You institute some. etc...

That is how you boil a Grecian.

Quote:

Gradualism is how you di it. We demand specific programs be instituted. You institute some. We come back and demand more programs be instituted. You institute some. etc...

That is how you boil a Grecian.

No, this is how a Grecian boils you.

It is like M.A.D. from the 80's - Greece knows that they don't have to do anything because they can blow up Europe by defaulting. Same with Spain and Italy and others. Germany can blow it all up by NOT sending any more money. It's a political crisis much more than an economic crisis - the state will do whatever the state feels it must to preserve the state - and we will see continuing craziness from the EU, ECB, IMF, etc. for a while more. I will bet a lot of money that Greece gets more bail-out funds somehow regardless of what reforms are being implemented or not.

My guess is that it ends like the movie Reservoir Dogs - where everyone has a gun pointed at someone in a stand-off, someone shoots, all hell breaks loose and everyone dies at once. We'll see if Germany has the balls to shoot first.

Quote:

Yet this is the model on which we have built our so-called "financial system." There is essentially zero risk of prosecution; this is proved at this point with the Statute of Limitations having either run or being close to doing so for most of the crimes during the housing bubble and its aftermath, being limited in most cases to either five or seven years.

These financial and economic criminal acts occurred during a time of a declared conflict during which American forces were in conflict(remember Congress passed an resolution for Iraq and I think Afghanistan). They hurt our ability to fight effectively, by distracting the executive branch.

The statute of limitations for treacherous acts (Treason) does not have an expiration. A truly incorruptible Attorney General (it won't be a Democrat or Republican) could in essence charge those who committed financial crimes as acts of treason against the Republic at a time of a declared resolution of conflict. Better yet, they could be construed as terrorism and then all of the rules for terrorist acts and terrorists could be applied (maybe 20-30 years in detention without counsel or a trial?).

Nuke, I'd prefer summary, QUITE PUBLIC, execution.


But Bubba's daily ass*****s would work if it's all we could get.

"There is essentially zero risk of prosecution"

THIS IS THE MAIN PROBLEM. Unless there are handcuffs or people take to the streets, the system WILL NOT CHANGE. Waiting for it to happen,UNLESS YOU BREAK the current criminal nexus between regulators, politicians and banksters, IS JUST WISHFUL THINKING.

Have you ever heard of power being handed over peacefully. If Gaddafi can be overthrown I am sure that Americans get together they can do it much more easily. When will this happen? Your guess is as good as mine.

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The new Greek finance minister, Yannis Stournaras, until recently a professor of economics at the University of Athens, hasn’t learned yet the art of extortion that is required to accomplish anything at all during negotiations with the Eurozone.

Is this a failure? I don't think so - it is already a partial success. Through the course of two elections they managed to reframe the 90 of 300 specific measures that were actually implemented as being "too harsh". Not that the Troika was hoodwinked or anything - certainly they were well aware of all the unaccomplished measures 6 months ago, a year ago, probably longer - they just can't pass up a good waltz

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Nuke, I'd prefer summary, QUITE PUBLIC, execution.

Unfortunately, we first have to vote, replace via impeachment or otherwise get an administration that will appoint into office individuals like an Attorney General that will prosecute to the full extent and creativity of the law.

I'd add that if we prosecute under terrorist acts and treason, there is another plus: the much loved immunity of Congress and all other government officials is not valid.

I don't care what the punishment is, as long as they are permanently removed from power and sucking off the teat we fund through our taxes.

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Remember that the "subslime" problem wasn't so much that bad loans were made. That happens all the time. It was that people lied about the leverage they were carrying with those loans, in that they had alleged "swaps" that would make them good even if they defaulted, and thus were carrying little or nothing in reserve against them. When the swaps become imperiled and capital calls came, there was no money to meet them.

For some reason I keep suspecting that the large banks, brokerages, commodity houses ect are all broke and it is just accounting sleight of hand that is keeping them all going. Somehow I suspect that they are all doing the 'high finance' equivalent of kiting checks to stay afloat.

When I couple that with the fact that there are 800 trillion in derivatives out there I just can't see a good end. Hell, %1 of that is 8 trillion, so if 1% comes up missing pretty much everything goes poof. For some reason I keep imagining that many fianacial institutions are both short and long on the same asset via derivates and got that way because they could skim some transaction fee on both transactions. I suspect that the logic is that if you are long and short the same instrument then you don't need any collateral because they offset. Well, what happens if you owe on the long contract and can't collect on the short one? BOOM...

So much off-balance sheet and unregualted makes me very nervous.

Flap

Flap wrote..

So much off-balance sheet and unregualted makes me very nervous...

Along with making me nervous, they make me think of a sinkhole the size of Rhode Island unexpectedly opening up in the middle of some random wheat field in Kansas, out of which scamper untold thousands of cockroaches which immediately scatter in every direction.

Oh yeah, and each one is the size of Godzilla.

I equate Greece with our too-big-to-fail banks. Their fraud and corruption brought us to the brink of economic calamity, then they clamor that unless they receive more money, less regulation, and greater access to politicians (read: bribery) we'll collapse again!

We have a gun to our heads.

They're holding the economy hostage.

We need real leaders who refuse to negotiate with these economic terrorists.

Clintb350 ->>will send more money into USTs, allowing the borrowing / can kicking to go on longer. Sigh...<<

Yup, maybe the general rabble is starting to understand the Beggar Thy Neighbor strategy. Even the British press is wondering if absolutely everything is rigged, even gas prices -

http://www.telegraph.co.uk/earth/energy/....

from Dazedncornfused's link:

Quote:

Was the petrol price rigged too?
By Rowena Mason, Emma Rowley
9:00PM BST 15 Jul 2012

Concerns are growing about the reliability of oil prices, after a report for the G20 found the market is wide open to “manipulation or distortion”.

Traders from banks, oil companies or hedge funds have an “incentive” to distort the market and are likely to try to report false prices, it said.

Politicians and fuel campaigners last night urged the Government to expand its inquiry into the Libor scandal to see whether oil prices have also been falsely pushed up.

They warned any efforts to rig the oil price would affect how much drivers pay at the pump, which soared to a record high of 137p per litre of unleaded earlier this year.

Robert Halfon, who led a group of 100 MPs calling for lower fuel prices, said the matter “needs to be looked at by the Bank of England urgently”.

“We need to know whether the oil price has been manipulated in a similar way to Libor,” the MP for Harlow said. “This impacts on millions of people all round the country concerned about the price of petrol at the pumps.”

Petrol retailers use oil price “benchmarks” to decide how much to pay for future supplies.

The rate is calculated by data companies based on submissions from firms which trade oil on a daily basis – such as banks, hedge funds and energy companies.

However, like Libor – the interest rate measure that Barclays was earlier this month found to have rigged – the market is unregulated and relies on the honesty of the firms to submit accurate data about all their trades.

This is one of the major concerns raised in the G20 report, published last month by the International Organisation of Securities Commissions (IOSCO)....