From the discussions on our podcast last night:
Bachmann did well in the Republican debate because she was non-wacko and thus surprised many. However, Romney is still the frontrunner. The nomination is his to lose, even as a recent poll shows Cain (yes, Cain) closely behind him. But Ron Paul was the real winner of the debate because his ideas, once considered fringe, are now mainstream. For example, he has long opposed our foreign wars because they are bankrupting the US and is suspicious of the Fed. Other Republican though are cynically becoming anti-war as a wway to attack Obama, in the same way that the anti-Iraq war protests were mostly anti-Bush. Democrats vanished from the protests once Obama got elected. Republicans will become born-again hawks if they take the White House. And a Romney / Bachmann ticket could unite the Republican Party.
The Greece debt crisis may seem far away and unimportant. But it will impact us. Greece sooner or later will default or their debt will be restructured, causing much pain to over-extended banks holding enormous amounts of toxic glop bonds. When Lehman Brothers failed, everyone knew the consequences would be severe even if they didn’t know exactly what would happen. Moody’s just put the big three French banks on downgrade watch. This is a direct reaction to what is happening in Greece. A liquidity crisis could be coming because the big banks stop loaning because no one trusts each other or knows where the risk is. Your bank loans $10 billion for a week to another bank who discovers one of their counterparties just became insolvent because their credit default swaps on Portugal debt went the wrong way and that impacts them, the bank you lent to, and thus your bank too.
Iceland did it right. When their banks collapsed, they let them fail, nationalized them, arrested some of the CEOs, then defaulted on their bonds. International banks threatened them with no more loans. Iceland ignored them and is on the road to recovery.
The podcast is Steve Hynd of Newshoggers, Josh Mull (@joshmull) and myself.
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