For those who haven’t been paying much attention, the race is being shaken up considerably by the surprise surge to the front of Liberal Democrats party leader, Nick Clegg. Nice.

…credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.

“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.

Crazy, right? Legal, oh yes. Perfectly. These days. (see here)

As I wrote about in an earlier post, I’m reading Jacques Barzun’s history of our past five hundred years (“FROM DAWN TO DECADENCE 1500 to the Present/500 Years of Western Cultural Life”).  Today, reading the Times story, I recalled something I just read in the Barzun book.

He is describing the 16th century Protestant Reformation,  a revolution against the widespread (Perfectly. Legal.) institutional decadence of the time:

The system was rotten. This had been said over and over; yet the old hulk was immovable. When people accept futility and the absurd as normal, the culture is decadent. The term is not a slur; it is a technical label.

Continuing to try and find the god/devil in the details of what the European Union is doing or not doing to help the oh-so-ailing Greece, I came across some helpful clues supplied by Jürgen Stark, the European Central Bank Chief Economist.

In an interview in today’s Spiegel Online International, Stark faces some grueling questions and is unshakable in his tough love fiscal perspective (“‘Everyone Is a Sinner at the Moment’” Feb 12, 2010).

Topics covered include, of course, Greece’s teetering on the brink of bankruptcy, plus the debt of other member states of the EU, and the health of the Euro itself these days.

One of the first questions was about how safe the Euro is at present. Stark’s reply:

Stark: We have been in a global crisis for more than one-and-a-half years now. We still can’t say whether it’s over. But you could just as easily apply your question to other regions. No one talks about whether the United States could break apart because of California’s ailing finances. So let’s not take things too far!

SPIEGEL: Washington and the US central bank, the Fed, would certainly intervene before allowing California to go bankrupt.

Stark: To be honest, I don’t see that they would do that. There are many examples to the contrary in the history, including American history.

If you want info about the Greece-EU-Euro situation, other than the one-note dirge that’s commonplace in the headlines of USA and UK news coverage, this interview’s a good place to begin. (For earlier posts on this topic, go here and here)