The Economist writes a gloomy assessment for 2008. It's hard to fathom that rational, albeit greedy, people would loan these huge sums to others with shaky credit. If banking is regulated, should other financial enterprises and complex debt instruments also be bound by similar rules? I'd be the last to want a huge bureaucracy created to do this, but massive amounts of debt writedown, in the range of $200-300 billion by The Economist's and others' reckoning is way over the top.
Financiers and others seem to think little downside risk is possible in a growing global economy. Reality has proven them wrong. Is all this the result of the web-like interconnectedness of financing these days?
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