Monday, February 8, 2010

PIIGS in a Blanket

As various measures of the health of sovereign debt issued by Portugal, Italy, Ireland, and Greece, Spain continue to rise, I keep thinking of this conversation in Sneakers:
Cosmo: Posit: People think a bank might be financially shaky.
Martin Bishop: Consequence: People start to withdraw their money.
Cosmo: Result: Pretty soon it is financially shaky.
Martin Bishop: Conclusion: You can make banks fail.
Cosmo: Bzzt. I've already done that. Maybe you've heard about a few? Think bigger.
Martin Bishop: Stock market?
Cosmo: Yes.
Martin Bishop: Currency market?
Cosmo: Yes.
Martin Bishop: Commodities market?
Cosmo: Yes.
Martin Bishop: Small countries?
Only this time, instead of some anarchist mobster accountant, the mania seems to be driven by the investor class for ... well, why exactly? Do we know something about PIIGS finances today that we didn't know three months ago?
Post a Comment