Derivatives need a priest

Imagine two ways of framing a financial trading choice. The first way is in the pseudo scientific language of finance. “An optimal trading strategy will be to go short on Greek and Spanish government bonds to exploit a high likelihood of sell off and debt restructuring which will keep portfolio returns well above inflation going forward.” Or consider the same thing expressed this way: “If we sell off Greek and Spanish government bonds it will push Greek pensioners into poverty, cause deep harm to the social fabric, lead to destabilising political unrest and threaten the stability of the world financial system.” The first way of framing the choice is treating the financial strategy as a way of dealing with a machine; the language has nothing to do with people. The second way of framing it is moral: starting with the effects on people.

Of course, the latter way of framing the choice is never used by traders, analysts or economists. The assumption is that the global financial markets are there to serve capital, not people (if it benefits people, fine, but that is after the fact). It is conceived as a giant piece of machinery whose behaviour can be successfully interpreted by those clever enough. Of course, it is an illusion. The machinery is impelled by people trying to interpret the machinery; that is why forecasts and predictions have such a poor track record. Because markets are full of people with minds, predicting what those minds will think and do requires much more than a mechanistic analysis. Nevertheless,  the capital markets are seen as a piece of machinery. If one looks at the metaphors, capital “flows”, for instance, is a sort of liquid looking for equilibrium (another popular metaphor).

The appearance over the last decade and half of massive amounts of meta-money, the $700 trillion of derivatives that represent twice the capital stock of the world, has made this “scientisation” of capital extreme (as seen in the use of NASA scientists on Wall Street). At least when it is bankers lending to individuals or business it is clear to all that real people are involved. Sure, capital comes first, the sums have to add up, but people are important, too. The same with conventional equity investment; the people, investors, boards and staff in the company, all matter to some extent. But when it is derivatives traders playing the numbers, there is no sense that people are on the other end. The same with high frequency trading on the stock markets; the algorithms do not include any people dimension. If they did, they could not work.

Robert Shiller argues for a return to morality, as discussed last week.  James Montier of GMO argues that there should be a Hippocratic Oath in finance, an ethical standard that would restore some standards. But he, too, goes for an explicit scientific metaphor, physics in this case. He is trying to find ethics in the wrong place:

Bad Models, or, Why We Need a Hippocratic Oath in Finance

The National Rifle Association is well-known for its slogan “Guns don’t kill people; people kill people.” This sentiment has a long history and echoes the words of Seneca the Younger that “A sword never kills anybody; it is a tool in the killer’s hand.” I have often heard fans of financial modelling use a similar line of defence.

However, one of my favourite comedians, Eddie Izzard, has a rebuttal that I find most compelling. He points out that “Guns don’t kill people; people kill people, but so do monkeys if you give them guns.” This is akin to my view of financial models. Give a monkey a value at risk (VaR) model or the capital asset pricing model (CAPM) and you’ve got a potential financial disaster on your hands.

The intelligent supporters of models are always quick to point out that financial models are, of course, an abstraction from reality. Just as physicists can study worlds without frictions, financial modelers should not be attacked for trying to reduce the complexity of the “real world” into tractable forms.

Finance is often said to suffer from Physics Envy. This is generally held to mean that we in finance would love to write out complex equations and models as do those working in the field of Physics. There are certainly a large number of market participants who would love this outcome.

I believe, though, that there is much we could learn from Physics. For instance, you don’t find physicists betting that a feather and a brick will hit the ground at the same time in the real world. In other words, they are acutelyaware of the limitations imposed by their assumptions. In contrast, all too often people seem ready to bet the ranch on the flimsiest of financial models.

Someone intelligent (if only I could remember who!) once opined that rather than breaking the sciences into the usual categories of “Hard” and “Soft,” they should be split into “Easy” and “Difficult.” The “Hard” sciences are generally “Easy” thanks to the ability to perform repeated controlled experiments. In contrast, the “Soft” sciences are “Difficult” because they involve trying to understand human behaviour.

Put another way, the atoms of the feather and brick don’t try to outsmart and exploit the laws of physics. Yet financial models often fail for exactly this reason. All financial model underpinnings and assumptions should be rigorously reviewed to find their weakest links or the elements they deliberately ignore, as these are the most likely source of a model’s failure.”

What happens in markets has little to do with the behaviour of feathers or bricks, because feathers and bricks have no self awareness. This is typical of the positivism (something is only real if it can be measured) and reification (making inanimate things seem like animate things) that is inevitable when a pseudo-scientific approach is adopted. What I think is needed instead is the posing of two questions:

1. What is needed to make the system behave more responsibly towards people?

2. What should be the purpose of the financial system?

Neither question will be answered by looking to scientific method. Science only answers “what” questions” not “why” questions. It is silent on questions about meaning or purpose, they are outside its range. Yet the above two questions are really the questions that should be posed to regulators and governments, who at this point are cowed, or bought off, by the bullies in the large financial institutions.

The sometimes insightful, if a little odd, Robert Gottliebsen argues that banks should return to the Glass-Steagall separation  That would be a start. But he also reckons that Wall Street is too powerful, and that attempts to rein in derivatives are doomed because the politicians are outgunned: Obama after the GFC and probably Romney too, if he wins. That may be true, but the fight is worth it.

So here’s an idea. Maybe we can ask how it was that a system created for people ended being blind to people, especially weaker people in places like Greece? In this anthrosphere we have created, the one thing we seem most averse to is putting human beings at the centre. Much better to see it as a machine, and to spend our time poking it to see how it works.

GMO White Paper_The Flaws of Finance_James Montier_May 2012

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  1. > Maybe we can ask how it was that a system created for people ended being blind to people

    You could ask much the same question about our political system, not just the financial system.

    I don’t have the answer, but it’s gotta be in the area of power and money, and the system suiting people who have those.

    In any case, is it right to say the system was created for the people? I doubt it. Not sure if it was created, or if it evolved. And if it was created, I doubt it was created for the people.

    I do struggle quite a lot with the ethics of speculation, especially when we’re having periods like now.

  2. JacksonMEMBER

    Thanks for the post SoN. Particularly like the statement “We should treat all financial innovation with skepticism” – will never forget being pitched a “new” Macquarie product back in 2009, it simply made no sense other than the fees were high. I bought my wife flowers on the way home, at least I understood that investment.

  3. To play devil’s advocate:

    Shouldn’t the *people* of Greece and elsewhere have paused to think of the *financial* effects of their decisions, both joint and several, to award themselves various social benefits with other people’s money?

    You make a good point, but the door swings both ways. The ‘finance sector’ is people, too.

    • Yes, it does, but with the interconnectedness of the system now, the collateral damage is getting wider and wider.

    • e-girl, think I am with you on this on.

      SoN refers to the Greeks as ‘weaker peoples’, not sure they would like to hear that and not so weak when it comes as e-girl says to awarding ‘themselves various social benefits with other people’s money’. In addition, surprisingly strong when it comes to imaginative ways to avoid taxes of all sorts, surprisingly strong when building and expanding of self-interested public service. All good until it comes time to pay.

      It’s been 10 years since Warren Buffet declared derivatives “time bombs” and “financial weapons of mass destruction” – it was probably even translated into Greek!

      • I do have reservations about some derivatives plays, and have sympathy for the view that a deposit taking institution should not much around with proprietary trading. Mr and Mrs Average put money into a bank envisaging that their money will be quite safe, and that it might be used to lend to home buyers or businesses in their part of the world. Fair enough. I have a soft spot for credit unions, for example.

        However, populations that continually vote for profligacy, and which make no effort to pay for their own expenditure, should not be viewed sympathetically.

        I rather think the Germans will attempt to save the Euro. Changing to the Deutschmark would harm their export trade.

        “In any horse race I always back Self Interest At least I know it’s a trier” — P. J. Keating

        • dumb_non_economistMEMBER

          Yes e-girl, I couldn’t agree more. But at the same time does a lender deserve any consideration when they completely disregards a lenders ability/capacity to repay. In this case I’d say the lenders are far more sophisticated and deserve to get badly burnt, if I lent money to a crackhead and they default would anyone have sympathy for me, I doubt it.

          • JunkyardMEMBER

            +1 if you keep selling a crack head more crack on tick, on the hope one day they will clean up, get a Job and pay you back…. Then you are just as responsible, perhaps even more so.

  4. Nice post SoN…thanks.

    In 2001 Goldman Sachs, and JPM helped Greece cook the books to get entry to the EU. And right now they are in Spain cooking more books for Spanish banks; who knows what else they are up to.

    The average person has neither the time, or in many cases the ability to understand complex financial instruments, and as we found out during the GFC, the regulators, and you can argue even JPM a week ago Thursday didn’t either. JPM was expected to loose USD 2Billion, but it’s now at USD 5 Billion, but will it end there?

    I can’t find the link, but there is some evidence that if Greece leaves the EU, that no one really knows how the unwinding of complex derivatives will end up.

    Banks, and their complex instruments are out of control, and regulators have failed.

    “$700 trillion global over-the-counter derivatives market”

    No risk here?

    • Why do I suddenly feel the need to own more gold 😉

      Let’s face it the ‘regulatory’ response is only going to be to get the banks to hold a tiny bit more ‘tier 1’ capital – much of which will be compromised by the embedded risk in the system.

      Asia has shown it doesn’t do booms in halves – get ready for a wild ride!

  5. One must understand that liberal economic theory was a moral theory, and came in reaction to Christian moral theory, which had failed in many aspects. Christian morality, which believed that what the Romans called mos maiorum could be instilled in humans, had failed because human beings are so adept at dressing up their greed and other base impulses in noble causes. The conquistadores, for instance, didn’t admit to killing off more 90% of the native populations in the New World and enslaving the rest by admitting to the pursuit of greed and power. They did it in the name of God.

    The problem is that we replaced one moral theory (Christianity), which was based on partial truths, with another moral theory (liberalism) that was equally based on partial truths. The assumptions that underly liberal ideology are hardly more realistic than than those that underly Christian ideology. Homo economicus has about as much basis in reality as does the Garden of Eden, or as liberal economic theory’ operative assumption: that a well functioning society, maximum aggregate utility and a just distribution of goods and services can be achieved by everyone striving to maximize their own materiial self-interest. So in place of one faulty mythology (Christianity) came another equally faulty mythology (liberal economic theory). And it only got worse from there. Neoliberal and neoclassical ideology are the deformed and highly pathological step children of liberal and classical theology.

    • glen5875.

      Really great contribution. Thank you.

      The logical connection IMO is that finance is a scapegoat to its political arm. While notionally democratic, the political wing of global finance is chock full of people driven by their own political success and will buy that success, forever beholden to their true masters.

      Global finance.

    • “. The conquistadores, for instance, didn’t admit to killing off more 90% of the native populations in the New World and enslaving the rest by admitting to the pursuit of greed and power. They did it in the name of God.”

      They did their most efficient killing by bringing new diseases to a receptive population. Without a working knowledge of immunology, they percieved these deaths to be “by the will of God”.

      • The disenchatment with God that began in the 16th century flourished and grew until it plateaued towards the end of the 19th century, and was famously heralded by Nietzsche when he proclaimed “God is dead.” Side by side with the disenchantment with God came the enchantment, and in fact the apotehosis, of nature, along with a piece of metaphysics that made the claim that science (read man) has a way of knowing nature’s will. So in the stead of high priests claiming to know the will of God, we now have scientists (read economists) claiming to know the will of nature.

        And instead of blaming the bad things that men do on the will of God, we now blame them on the will of nature.

        Robert Heilbroner described how the new science works in “The Worldly Philosophers”:

        “For quite without intending it, Malthus and Ricardo did one astonighing thing. They changed the viewpoint of their age from optimism to pessimism. No longer was it possible to view the universe of mankind as an arena in which the natural forces of society would inevitably bring about a better life for everyone. On the contrary, those natural forces that once seemed teleologically designed to bring harmony and peace into the world now seemed malevolent and menacing.”

        “They lived in a world that was not only harsh and cruel but that rationalized its cruelty under the guise of economic law… It was the world that was cruel, not the people in it. For the world was run by economic laws, and economic laws were nothing with which one could or should trifle; they were simply there, and to rail about whatever injustices might be tossed up as an unfortunate consequence of their working was as foolish as to lament the ebb and flow of the tides.”

        “The laws were few but final… Adam Smith, Malthus, and Ricardo elaborated the laws of economic distribution. These laws seemd to explain not only how the produce of society tended to be distributed but how it should be distributed. The laws showed that profits were evened out and controlled by competition, that wages were always under pressure from population, and that rent accrued to the landlord as society expanded. And that was that. One might not necessarily like the result, but it was apparent that this result was the natural outcome of society’s dynamics: there was no personal ill-will involved nor any personal manipulation. Economic laws were like the laws of gravitation, and it seemed as nonsensical to challenge one as the other.”

  6. Alex Heyworth

    This probably isn’t the right place for this, but then there isn’t a right place for it. There is one significant flaw in the way MB is run, which I am sure many commenters have already encountered and which eventually all of them will.

    When comments on an item are closed, there is no warning anywhere that that is so. On a couple of occasions now I have spent a good deal of time researching and composing a post to a thread, only to find that when I post the comment, it has disappeared forever. If I try to repost the comment, I get a message saying duplicate comment, so there is clearly no error in the posting process – WordPress has registered the comment, but it will not be posted – ever.

    This needs to be fixed. Now. For a site that is otherwise so professional it is an entirely unsatisfactory situation.

    • Alex H:
      Completely agree.
      Not sure I fully understand the situation you describe (I gather the ‘reply’ button was available for you to make the post but your comment then disappeared into ether), but I encountered similar problems posting comments a few times. I composed a comment in TextEdit (because it’s easier/safer) only to discover there was no ‘reply’ button when I was ready to post the comment (i.e. comments had been closed). In one instance I’m sure the ‘reply’ button was available when I started to write the comment, but it was gone by the time I wanted to post the comment. (I’m not a fluent writer so it takes me a while to write even relatively short comments.) It’s possible I simply didn’t notice comments were closed when I composed a comment on another occasion. Either way, it’s a waste of my time and has discouraged me from making comments.

      On a similar topic:
      I don’t enjoy reading MB as much as I used to. Comments on some posts get too bogged down in ‘he said, she said’ (often by just a few commenters bickering with each other). One of the attractions of MB is links to other articles that people put with their (often interesting) comments, but when I encounter a long thread of comments that includes a good deal of bickering (from a few) I find it’s too time-consuming to try to sort the wheat from the chaff.

      I’m not sure what readership MB aims for, but I’m not steeped in economic/business/political knowledge and lingo, so I find some comments are too full of abbreviations and “insider talk” for me to follow (even the gist).

      Now…. I guess I should hurry up and post this while I still can.

      • Forty-niner,

        Have had similar problems very occasionally – generally seems to happen when you take a fair while to compose the response. I don’t think it’s because comments are closed – just seems to be a quirk of the system – maybe we all need to chip in and buy the MB blokes a Cray for christmas.

        As regards the “lingo” – also have a similar problem from time to time, but, hell, that’s half the fun of it. Learning something you didn’t know before – coming to this site gives you information, knowledge, and a free education in finance and economics thrown in to boot. What more could you ask for?

        Seriously, from time to time I strike an acronym or a word/phrase I don’t understand (probably just about every article 🙂

        I just keep another Explorer tab open with Google running on it. Slip over to the other tab, check out the offending term on Google, and then come back to MB and post like an instant expert 🙂

        Regards the bickering and to-and-froing – yeah, it can get a bit heavy at times, but you soon learn to recognise a slanging match when you see one (a beauty over the weekend), and just slide on down to the next blokes comment.

        It also doesn’t hurt to remember that, as far as I know, the blokes who write the articles and run this site are also trying to make a living someplace else as well. Gotta cut ’em a bit of slack, eh?

        I wouldn’t let any of this put you off coming to this site – it should be compulsory reading for every Australian.

        P.S: A Cray is a superfast computer – apologies if I lapsed into lingo there 🙂

  7. PantoneMEMBER

    “If we sell off Greek and Spanish government bonds it will push Greek pensioners into poverty, cause deep harm to the social fabric, lead to destabilising political unrest and threaten the stability of the world financial system.”

    Can you explain how this will happen? Someone will have to buy those bonds, you can’t sell to no one.

    • I think the point is that if people are short selling on mass then it puts what some would call “artificial” negative price pressure on the bonds, which means that yields will go up, which means that the government will have to pay higher interest rates. If the government is paying high rates, then less money is available for more social benefits etc..

      Whilst this is a valid concern, I really do agree with some of the comments about the greek government being responsible for getting into that mess. Clearly they were borrowing more than their income could support, so it was irresponsible. If I did this I would be hung out and would have to declare bankruptcy, no bank would pity the fate of my family and give me funds to cope.

      It’s only the scale of the problem that means other governments bail Greece out and only out of their own self-interest – because they think if the Euro fails their own necks will be on the line too.

      If I borrowed so much money that my default triggered a bank to collapse, they would no doubt be trying harder to help me.

      The other side of the Greek problem is tax avoidance is apparently so systemic in Greece that the Government’s income is drastically lower than it ought to be. To this the people themselves must be put to blame, but it’s probably the wealthier ones who contribute the most and sadly these people will be the least effected by their countries turmoil.

      • Their borrowing was fine when they were paying as much as interest rate as germany,. around 2% but
        everything went overboard once “bond holders” were asking 7-10 and now 27%

        as these rates all borrowing was used to service the interest of debt.

        Ridiculous situation that ECB is 100% responsible for.

        ECB as been ok to create from tin air 1,000 billion euro to inject in banks the last few months at pretty much 0% interest rate but their are asking criminal rates to Greece.

        If ECB would have lent to Greece one fifth of the money created last january for banks at 1% everything would have been back on track, and tax money use to pay for infrastructure instead paying dead money/ stupid interest to German/French bankers.

        • The risk you refer to is largely ignored by borowers everywhere and at their own peril.

          As Mega Bank has come to feel the pressure of borowing short term to finance long term investment based on historically low interest rates.

          Interest rates engineered to (low) levesl that do not reflect the myriad risk in a global economy.

          I reiterate, finance is the symptom of a faulty political system that is steeped in the present, and parhaps the next 4 years.

          Financial reform can only follow political reform. This is perhaps what we are witnessing in Greece and is in fact the most positive aspect of this otherwise dissterous event.

  8. I think this is a really interesting issue and should be given a lot more thought and discussion. Without wanting to make a murky subject even more opaque, I have a couple of observations to offer, as follows.

    First, I think it is arguable that almost all financial securities are “derivative” in some sense or other. For example, an insurance policy against the fire risk on a building is “derived from” the certainty of a measurable loss IF the building catches fire, matched up against the value of the building and knowledge of its state at the time the policy is created.

    Each side of the policy is making a bet about the risk of fire and the cost of restoring the loss if a fire were to occur. The important things to note are that at the beginning there must be a building, but there can be no fire – merely the risk of one. The income paid to insure against the fire-risk can also be converted into a security (a cash-flow stream) and traded onwards or used to purchase re-insurance. Such downstream trading is a good example of a derivative contract being made the subject of another derivative exchange. At no point, so far, has a fire broken out. All that has happened is that risk protection and cash-flow have been traded.

    Few would argue that this is not socially and economically useful. If a fire were to occur, the owners of the building would have their loss covered. In this way, one element of property-owner’s uncertainty has been at least partly mitigated, enabling, among other things, the property market to function more efficiently. In the sense that both risk and protection are pooled, this represents a form of mutual saving. Indubitably, this will create welfare benefits for individuals as well as the community in general.

    On its face, this is directly comparable to the CDS market, for example. The question, then, is how does the CDS market differ from the market for fire insurance? One thing cited is that it is possible to buy or sell CDS without being exposed to the underlying security. So, for example, one can “short” Italian bonds (without owning them) and buy CDS at the same time, possibly earning a profit by speculating against the value of the bonds. In the insurance market, to achieve the same advantage you could buy fire protection insurance and then set fire to the buildings (which you do not actually own). In other words, in the insurance market, you would have to commit arson to obtain a cash benefit.

    Perhaps the same kind of limitation should apply in the debt markets, so that short-selling debt would be considered to be the financial equivalent of fire-bombing. This sounds intuitively appealing. After all, you should not be able to sell (or set fire to) something you do not own. However, as we know, nothing is quite that simple. Shorting is really just a promise to deliver a security at a later date. A sale today is matched by a purchase in the future, and the risk is with today’s seller. So why inhibit anyone from taking a risk if they really want to do it, especially if it adds to liquidity and improves price-discovery in a given market. These things are just not easy to resolve analytically.

    To take another very commonplace example, shares in publicly-listed companies are also “derivative” instruments in the purest sense. Shares do not create an immediate title to the assets of the company concerned. Rather, they represent contingent, equitable liabilities of the company. Shares are a subordinated right to receive a perpetual but uncertain portion of a company’s future income, or of the assets that might remain if the company were liquidated. These rights are purely derivative; that is, to state the obvious, shares have no inherent monetary value in themselves. Their value is derived from the cash-flows produced by the underlying company assets; and this value can be freely converted to cash because of the existence of an organized, visible, quotable, predictable and competitive legal exchange. In the absence of an open exchange mechanism, shares would be no more useful than the right to a share in the income of a sole proprietorship. You would have to wait from one year to the next to receive a profit-distribution and would find it very difficult to capitalize the implied sum of future earnings.

    So the insurance/ re-insurance markets and the share market itself are essentially places where “derivative” values are computed and “assets” are exchanged. The same is certainly true of debt markets.

    So what is the difference between insurance, debt and equity markets and other derivative markets? Mostly, it seems to me, the difference lies not in the intrinsic characteristics of the securities, but in where, by whom and how they are traded.

    Most of the trade in derivative products relates to debt instruments and foreign currency swaps. Some relate to the future value of commodities and equities. They are nearly all generated as over-the-counter trades, rather than as exchange-settled deals.

    Exchange-settled dealing grew out of private-subscriber business, and occurs where the dealing is between brokers on behalf of individuals and the securities traded are simple derivatives – usually equities.

    Perhaps all securities dealing needs to be executed on recognized exchanges. So, for example, we should all be able to buy or sell Italian or German debt if we like, in parcels small or large, according to our asset and risk profiles. We should all be able to buy synthetic/perpetual AUD-Yen futures on a retail exchange, managed and settled in the same way as we buy and sell BHP, for example.

    This would mean that I could, for example, settle my weekly USD/AUD transactions on an online market, or fix next month’s AUD rates, all with immediate clearance and settlement and without broking by my own bank.

    This would require “derivatives” to be defined in standard terms; trading could be made subject to all the usual rules and procedures that remove counter-party payment risks and systems would be created to guarantee minimum liquidity and transparency.

    The dominant securities dealing firms – the invincible hulks of the markets – would probably oppose this kind of thing, not least because it would expose them to more scrutiny and competition, limit their ability to arbitrage margins and because their broking privileges would be curtailed.

    I think it is time to simplify all this. Finance is about concepts that nearly everyone can understand – cash, income, saving, debt, equity, time, risk, settlement and negotiability. There is no doubt that efficient and transparent financial markets are necessary for market-based economic processes to occur and for the creation of both individual and wider social welfare.

    We can devise a system of rules and checks that will allow an all-product financial system to function properly. This is not difficult in principle, but requires political will to bring into reality. It is necessary to de-mystify and then to reform financial markets. We are all in one way or another both consumers and producers of financial products. We need to exert more public-benefit influence over how financial products are defined, mediated, priced and exchanged, and we need to do it sooner rather than later. Finance is aching for reform, as the recurring distress in Europe amply illustrates.

    • What about distinguishing between money, the money made out of money, and the money made out of money (derivatives)? The latter being an infinite regress

    • That’s a good snapshot – everywhere you look gormless politicians (and through them taxpayers) have been hoodwinked into propping up the speculators. There isn’t much wrong with speculation that attribution of real risk wouldn’t help fix.

      From property in Aus, to global equity markets, to the global bond investors, the taxpayer has ended up as the chump backstopping the risk.

      Big capital has figured out how easily it is to compromise the punters so they don’t arc up as their dollars are slipped away… romance them with a little taste of the speculative action.

      Every two-bit property speculator has now become an advocate for back-stopping the development machine with taxpayers bucks. Every mum and dad with an equity exposure is pleased to see more QE and corporate bailouts. Every Greek citizen that was encouraged into property/asset speculation on euro prices became an advocate for the bond holders.

      In return for the tiniest piece of the pie – the junior speculators are lobbying to allow the meta-money to continue to grow, with taxpyer back stopped risk, and life just gets financialised as this continues to seep back into the world of real things.

  9. Let’s face it, 2008/9 showed everyone that the Global Financial System had in fact become a great big Ponzi scheme. Off the book SIV’s and other accounting voodoo mechanisms had become completely fanciful- and worthless at the core of the World’s big banks.

    Nothing has changed since then , other than Sovereigns stumping up printed and deficit financed cash and altering accounting rules in order to provide crutches to big financial institutions for survival.The public fear and horror has receded. For now.

    Survival but not fix or repair. Because it can;t be fixed. It’s going to all end very badly at some point. Between now and then, ructions and crises will occur similar to the current period with Greece and Spain.

    At some point, all debts will be cleared. By default, by inflating them away or paying them back.

    This is a process.