Interesting times. As we transitioned from a manufacturing economy to a debt service, or renting, economy what are the implications of retained risk with a country’s economy having historical amounts of corporate and household debt?
In other words, what will the losses be when the blowouts start happening? Will those losses be magnified, similar to the subprime markets of 2008, we side betting?
Read an interesting piece on life insurance companies. This will be a black swan event for them but are they capitalized enough to avoid collapse or will they require a bailout and, if so, at what cost?
This scenario and many others look to play out in the coming days. Like universal healthcare, it would probably be proven to be cheaper to invest in public goods and services, or ‘the general welfare’, than it does to periodically bail out Mr. Market as he’s now the only option for basic necessities for life and seems to need a lot of cash every 7-10 years to keep his car on the road.
