Haircut Time for Bondholders

[MsDoodahs]

Mike Whitney, Counterpunch

http://www.counterpunch.org/whitney03122009.html

Opening paragraph:

"When George Soros recently said that the financial system had "effectively disintegrated", it caused quite a flap. But Soros was not exaggerating. The financial system has disintegrated. What we are experiencing now is just the fallout from that event. This is easier to understand using an analogy. Imagine watching the demolition of a hundred-story skyscraper. After the explosives detonate and the building implodes, the chunks of debris and the shattered glass begin to fall to the ground below. That's where we are right now. The financial super-structure has already been blown to bits, but a thick shower of fragments keeps raining down on earth. Rising unemployment, falling consumer confidence, severe contraction of the economy, growing pessimism; these are all the knock-on effects of a full-blown system collapse."

Closing paragraph:

"Bondholders own everything and they shouldn't be trifled with. They represent foreign banks, governments, sovereign wealth funds, and industry giants. They can afford the losses better than the taxpayer, but they won't be happy about it. There's bound to be retaliation and gnashing of teeth. It will require a carefully executed strategy to avoid a bloodbath; a surprise incision with a razor-sharp scalpel followed by an Obama-led public relations campaign to placate the enraged bondholders. It won't be easy, but it has to be done, and fast. Unfortunately, we are no where near the point where anyone at Treasury or the Fed will set aside the corporate agenda long enough to do the people's work. That's why Geithner will have to go. Bernanke, too."

[ArchPaul]

Mike Whitney, Counterpunch

It will require a carefully executed strategy to avoid a bloodbath; a surprise incision with a razor-sharp scalpel followed by an Obama-led public relations campaign to placate the enraged bondholders.

Too bad the government always shows up late, with a bat for the brain surgery.

[acptulsa]

I was in the barber shop just the other day. There was a small male in there crying his eyes out because he didn't want a haircut. I thought it was just a kid who had never had a haircut before and was scared it would hurt. But maybe it was Premiere Wen...

Shoulda asked for an autograph.