The BofA $136B Dynamite Stick

Thanks in part to those conflicts of interest and lack of competition that Senator Shelby had talked about, along with a good helping of old-fashioned greed, the credit rating agencies had assigned AAA ratings (even safer than Enron’s rating) to billions of dollars of mortgage-backed securities that should have been labeled “junk.” If “tricking an

"exploding debt dynamics." It refers to an ever-increasing debt-to-GDP ratio, with higher interest payments and low growth driving the ratio inexorably upward with the passage of time.

It makes sense that the stock of total assets is such a big pile of stuff. You can think of it as the value of all existing raw materials, like land, oil, and timber, plus everything people have produced since the beginning of time that is still here (that hasn’t been consumed or worn out yet), plus all existing paper assets like bank accounts, Tre

Now the United Kingdom is on the hook for some of the largest banking institutions in the world. (RBS’s balance sheet alone when it was nationalized was bigger than the United Kingdom’s GDP.) Indeed, the banking sector in the United Kingdom is one of the world’s largest: Assets of U.K. banks are more than five times the country’s GDP. In the United

(Rockefeller borrowed aggressively from banks, but those were mostly cash flow loans that were quickly repaid, not long-term investment capital.)

To understand how the current system might spin out of control and where the unraveling might begin, look at where the complexity – aka systemic risk – is of late being concentrated most quickly. Post-2008, the two areas that stand out are government debt – which has been substituted for private debt as governments have borrowed unprecedented amoun