A good read. 2-4 years to suffer, a lot
of restructuring work ahead, perhaps, nationalization
of major derivatives dealers. Then, perhaps, growth
can resume. I view it as unlikely that USA will remain
in economic depression for decades - we've been in it
for 8 years and counting. The derivatives are very scary, but
less scary than the notionals appear them to be, and are
bilaterial - they don't add anything to the mess or subtract
anything from the mess. They tend to amplify the upside
and the downside a great deal, as markets can be manipulated
with little money, then collapse, as they did. When a
derivative contract is settled, the money doesn't leave the
system. When an asset price drops, it does, gets swallowed by
debt.
GSE Nation: How Bailouts and Nationalization Change the US
Banking Model
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