Understanding the current Financial Crisis is very difficult. Even the insiders I speak with have no real explanations for the melt down American finance has gone through in the last few weeks. In such cases, it is often best to start with the basics. Loans were made to a large number of people who because of some change in their situation - divorce, health problems, or loss of job - can no longer pay back or could never pay back what they borrowed. Now the question is who is going to incur the loss. Everyone involved must have had some suspicion that this would happen. The current financial crisis was caused by their efforts to "manage the risk" and not be left holding the bag when the music stopped. Accelerated by derivatives, this exercise in risk management created an interlocking system of obligations that left everyone exposed. So the answer to who is going incur the loan losses is all of us either though an economic depression or government intervention and though the tax system. My personal preference would be though government intervention, but that may just be me.
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Does Anton Chigurh = Perry Smith?
Over the weekend had the chance to see again the 2005 biographical film about Truman Capote that won Philip Seymour Hoffman the Academy Award for Best Actor. This inspired me to get out my copy of book Capote was working on at the time In Cold Blood. In the film Capote said this book would create a new way of writing. Maybe he never said that or maybe that is not what he meant, but is it just me or is the character Anton Chigurh in Cormac McCarthy's No Country for Old Men based on Capote's Perry Smith?
