Steadfast FinancesMichael Lewis: California's Debt Crisis is Topic of Next Article

Michael Lewis: California’s Debt Crisis is Topic of Next Article

Filed in Banking , Financial Crisis 0 comments

One would have thought Michael Lewis’ The Big Short would be the pinnacle of financial post-mortem exams. But his latest masterpiece on Ireland’s financial house of cards poignantly summarizes the “Perfect Storm” effect of behavioral economics: unregulated financial markets, greed for making money trumps fear of losing money, and good old fashioned herd psychology.

Most interestingly, the target of his next article isn’t sovereign debt crisis laden countries like Iceland, Greece, Ireland, etc., nor is it a Wall Street firm who skated the legality of finreg – it’s our very own state of California. So if you’re a ardent support of the “west coast is the best coast” theory, now might be time to engage in a bit of cognitive dissonance as a prophylactic precaution before the story hits.

The cause of the global financial crisis in various countries [and U.S. states] is all basically the same thing: it’s incontinent credit. It’s been washing in at terms that shouldn’t be offered, to people who should never be lent money in the first place, in countries that shouldn’t be lent money.

- Michael Lewis

California financial crisis discussion ~ 14 min mark

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Posted by CJ   @   12 February 2011 0 comments
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