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« WSJ: The End of Citi's Financial Supermarket | Main | - Czemu Bernie, czemu? »

January 21, 2009



Great piece, especially the parallel to the housing market. As most people buy homes on credit (i.e. "what's it gonna cost me per month?"), you can't underestimate the importance of low mortgage rates on asset appreciation. Cubs have a "problem" in that Wrigley is Chicago's biggest and best beer garden - nothing like a summer afternoon on the north side. Fans will show no matter what, and they will watch their hard luck team on WGN no matter what, so what is the real incentive to spend that incremental dollar to win the WS? Unless, as you point out you can do it with other people's money...

Jeff Eckles

Nice job Andy- one of your better pieces. An entertaining and educational slant depicting the cure of our economic ills: A bitter pill called DELEVERAGING.


Another great post! This is one of the few blogs/sites to "tell it as it is" in well written posts based on rational analysis. Keep up the good work!
Bob, London, UK.


You Bail Them Out, We Opt Out.

Dear, I should say Expensive Chairman Ben S. Bernanke,

All of Our Economic Problems Find They Root in the Existence of Credit.

Out of the $5,000,000,000,000 bail out money for the banks, that is $1,000 for every inhabitant of this planet, what is it exactly that WE, The People, got?

If my bank doesn't pay back its credits, how come I still must pay mines?

If my bank gets 0% Loans, how come I don't?

At the same time, everyday, some of us are losing our home or even our jobs.

Credit discriminates against people of lower economic classes, as such it is unconstitutional, isn't it? It is an supra national stealth weapon of class struggle.

Credit is a predatory practice. When the predator finishes up the preys he starves to death. What did you expect?

Where are you exactly in that food chain?

Credit gets in the way of All the Principles of Equal Opportunity and Free Market.

Credit is a Stealth Weapon of Mass Destruction.

Credit is Mathematically Inept, Morally Unacceptable.

You Bail Them Out, We Opt Out

Opting Out Is Both Free and Strictly Anonymous.

My Solution: The Credit Free, Free Market Economy.

Is Both Dynamic on the Short Run & Stable on the Long Run, The Only Available Short Run Solution.

I Am, Hence, Leading The Exit Out of Credit:

Let me Outline for You my Proposed Strategy:

✔ My Prescription to Preserve Our Belongings.

✔ Our Property Title: Our Free, Strictly Anonymous Right to Opt Out of Credit.

✔ Our Credit Free Money: The Dinar-Shekel AKA The DaSh, Symbol: - .

✔ Asset Transfer - Our Right Grant Operation - Our Wealth Multiplier.

✔ A Specific Application of Employment, Interest and Money.
[A Tract Intended For my Fellows Economists].

If Risk Free Interest Rates Are at 0.00% Doesn't That Mean That Credit is Worthless Already?

Since credit based currencies are managed by setting short-term interest rates, on which you have lost all control, can we still say that are managing?

We Need, Hence, Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.

In This Age of Turbulence The People Wants an Exit Out of Credit: An Adventure in a New World Economic Order.

The only other option would be to wait till most of the productive assets of the economy get physically destroyed either by war or by rust.

It will be either awfully deadly or dramatically long.

A price none of us can afford to pay.

“The current crisis can be overcome only by developing a sense of common purpose. The alternative to a new international order is chaos.”

- Henry A. Kissinger

What Else?

Until We Succeed the Economy Will Necessarily Sink Into a Deeper and Deeper Depression

You Bail Them Out, Let's Opt Out!

Check Out How Many of Us Are Already on Their Way to Opt Out of Credit.

Let me provide you with a link to my press release for my open letter to you:

Chairman Ben S. Bernanke, Quantitative [Ooops! I Meant Credit] Easing Can't Work!

I am, Mr Chairman, Yours Sincerely [Do I have really the choice?],

Shalom P. Hamou AKA 'MC-Shalom'
Chief Economist - Master Conductor
1 7 7 6 - Annuit Cœptis
Tel: +972 54 441-7640
Fax: +972 3 741-0824


Cuban appears to be a flim flam fast talking car salesman type to me. But that is just me.


Great post on a well thought out and intelligent blog.


Ok, I don't know about this analysis entirely. Maybe I am missing the point. The value of future cashflows is partly a function of cost of capital, both cost of equity and cost of debt, right? Right.

So, if cost of debt goes up... then it makes sense that you get a lower valuation on same cashflows. Of course, your speculation Andy is that the bank itself was supposing the "greater fool theory." Was it? Hard to say. But we don't know. Also, I am not sure how these things typically work but in the tiny world that I inhabit, debt comes with warrants, equity participation, etc., so cost of debt in this case REALLY incorporates a cost of equity component. Andy, you seemed to argue against this. But maybe I misunderstood!

There does seem to be a big poo-pooing of debt here, but I disagree with that. Nothing intrinsically wrong with it, it's just another way of slicing up your cashflows.

*I'd* say that when the recovery comes (if), the REAL winners won't be the low-debt companies; they will be the firms with medium, substantial-but-still-sustainable debt that maximizes the rate of return on equity.


The Cubs should be competitive enough to keep pace with the others teams. I really like the Cubs . They’ve always been one of my favourite MLB teams to watch. I pass most time watching and looking for their news and videos. Last time I saw some hot videos of them here:

They really deserve our love so we must not stop supporting them .Go Go Cubs


I strictly recommend not to wait until you get enough amount of money to buy all you need! You should just get the credit loans or sba loan and feel comfortable

moncler coats

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

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