I have been trying to explain roughly this to many people since the beginning of this whole "crisis", although in much simpler terms. I am not sure if the idea I get across is any clearer though.
Originally Posted by Gooch
Still, I am not sure that the outlook is quite as fatalistic as this implies, the incentive on the financial institutions to not allow major governments to fall into social chaos seems like it may outweigh the typical risk management of defaulting. Even though diffusion of responsibility is one hell of a force, I am firmly on the side that the whole world is not going to collapse over this, barring a tactical move from china.
Check out Mr. Businessman
He bought some wild, wild life
On the way to the stock exchange
He got some wild, wild life