Sunday, January 10, 2010
Are we revolting?
I came across this on Max Keiser's YouTube channel. The rating agency Moody's have been thinking about creating a 'social cohesion' index. Basically, the idea is to try to quantify the risk of a popular backlash against sovereign debt repayment. Considering the rating agencies track record in recent years, I doubt they'll produce anything of use to gilts investors but the perspective on debt repayments caused by bad banking seems to be changing. As we've seen in Iceland, there has to be a limit to how much money you can expect to squeeze out of people.