Saturday, May 1, 2010

On Confidence

On a daily cruise through zerohedge, I came across the following quote referenced in a paper titled "Greece, The End of the Beginning" by Oisin Zimmerman:
"Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence - especially in cases in which large short-term debts need to be rolled over continuously - is the key factor that gives rise to the this-time-is-different syndrome.  Highly indebted governments, banks or corporations can seem to be merrily rolling along for an extended period, when bang! - confidence collapses, lenders disappear, and a crisis hits."
- excerpted from This Time is Different by Carmen M. Reinhart and Kenneth Rogoff