Jump to content
progressivecitizen

What's the deal with the economy?

Recommended Posts

So I'm sure this is naive, but please indulge me.

When there are economic problems in a country or globally, usually one side benefits at the expense of the other. But now everyone is suffering as the economy has been shut down. So isn't that a better situation in some ways? If nobody can make money, can't everything be forgiven? It seems like it would just be a pause. Tenants can't pay landlords, landlords can't pay mortgages, banks can't collect. So?

Share this post


Link to post
Share on other sites
3 hours ago, progressivecitizen said:

So I'm sure this is naive, but please indulge me.

When there are economic problems in a country or globally, usually one side benefits at the expense of the other. But now everyone is suffering as the economy has been shut down. So isn't that a better situation in some ways? If nobody can make money, can't everything be forgiven? It seems like it would just be a pause. Tenants can't pay landlords, landlords can't pay mortgages, banks can't collect. So?

The deals people concoct in this day and age can be exceedingly complicated.  If I don't pay my mortgage, that threatens some mortage-backed security somewhere, which is insured against default by some bespoke derivatives chain that might be 2 or 3 levels deep, all written with time built into them, if this happens then x-days later this happens, and this is due, and so on, and so forth.  

 

Pretty hard to unravel it once it looks like a Gordian knot.  But hey...when everything is perfect, the sun is shining and there are no bumps in the road, you can make a lot of profit with those knots.  That's what we did in the 1920's, too.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...