The Finch Formerly Known As Gold

15 May 2008

The last claim

Apparently there exist policies which insure against the failure of the market system:

It would take a cataclysm — around a third of the leading investment-grade corporations in Europe or half those in North America going bankrupt and defaulting on their debt — for the insurance to be paid out.

I asked one investment banker what might cause half of North America’s top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even "the big one," a catastrophic earthquake devastating California. All he could think of was "a revolutionary Marxist government in Washington."

This would seem unlikely — even the leftiest of incoming Democrats are run-of-the-mill Marxists at best — but just the same, the premium has increased of late:

Normally one can buy $10 million of end-of-the-world insurance for between two and three thousand dollars a year. By early last November, the prices quoted were between twenty and thirty thousand, and even then it was difficult to buy in quantity — at least, said the banker, "not from anyone you trusted."

(Via Jesse Walker at Hit & Run.)

Posted at 7:08 AM to Dyssynergy


Looks like the industry has been paying more attention to Obama's platform than the news media ever has.

Posted by: McGehee at 1:33 PM on 15 May 2008

Last November, the election looked like Clinton vs Guiliani. THAT is what they were scared of. Obama was just a token novelty on the Democratic roster at the time.

Posted by: Dan B at 2:06 PM on 15 May 2008
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