Two harmonic convergence quotes:
Lloyd Blankfein: You're getting out of a Mercedes to go to the New York Federal Reserve. You're not getting out of a Higgins boat on Omaha Beach...
Paul Krugman: In... The Longest Day... a German general... preparing for a war game in which he will play the American commander. He tells his aide that he plans to surprise everyone by landing, not at Calais, but in Normandy.... Then, when the invasion begins, he mutters, “Normandy! How stupid of me! Now you know how some of us felt as the current crisis unfolded.... U.S. external debt, although large, is overwhelmingly dollar-denominated. So America didn’t seem vulnerable to a third-generation currency crisis. No worries, then, right? Yet the logic of the models... a vicious circle of deleveraging could arise as easily on the asset side as on the liability side, as noted in Krugman (2002). It should have been easy to put the evidence of a mammoth housing bubble together with the concepts of third-generation crisis theory to see how a nasty deleveraging cycle could occur without the “original sin” of dependence on foreign-currency debt. Sadly, almost nobody – certainly not yours truly – put the pieces together. Even those of us who diagnosed that housing bubble correctly failed to foresee the financial implosion that would follow. Normandy! How stupid of me!...
I know what movie I am going to watch tonight...
