Comment Of The Week

Been rather distracted of late, with good reason. Some day maybe I'll go into it in detail.

Until then, a rather straightforward comment on a post by John Cole at Balloon Juice about bondholders and the looming GM bankruptcy:

Not to be to obtuse about this, but this is the bargain you make buying bonds. You get paid higher than the risk free rate in returns because you assume the risk that issuer could default. Bonds carry risk and if you buy bonds in a shitty company, you get paid higher than average returns because you assume a higher than average risk that the shitty company could default. I think it has been pretty evident to anyone paying even a little bit of attention over the last 10 years that GM’s position was unsustainable.

Investing is not a game where everyone wins all of the time. You make a bad bet and you lose. That’s the price you pay for an extra 5% on your money. The problem is that for the last 20 years, nobody has explained this to most Americans.

No shit.

Just don't tell anyone, in case we decide to slit our own throats and privatize Social Security sometime down the road...