Ooops, the truth about Greek ‘bailouts’ is getting out

Don’t look now, but the bankers are losing control of the ‘Greeks are lazy spendthrifts’ narrative.   Excellent piece from Charlies Hugh Smith, see: Greece just blew up the Empire’s death star of debt:

Impaired debt and defaults result from imprudent underwriting and lender incompetence/ greed. Since when did it become accepted policy to reward imprudent lending, incompetence and greed?

Classical Capitalism is very clear on what should happen to lenders who ignored risk management; they get destroyed. As imprudently issued loans default, the losses pile up and the lender become insolvent. At that point, Capitalism kicks in and the management is fired, the stock goes to zero, the lender’s assets are auctioned off and the creditors are issued whatever remains after wages, taxes, accounts payable, etc. are paid.

There’s nothing complicated about it: Capitalism requires the discipline of losses being taken by those responsible, the firing of incompetents and the destruction of imprudent lenders….

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