You'll Be Happy to Hear the Revolutionary State Has Seized Everything Except the Insurance Industry
Talk about markets in everything:
I became intrigued by an oddity that I came to think of as the end-of-the-world trade. The trade is the purchase of insurance against what would in effect be the failure of the modern capitalist system. It would take a cataclysm -- around a third of the leading investment-grade corporations in Europe or half those in North America going bankrupt and defaulting on their debt -- for the insurance to be paid out.
I asked one investment banker what might cause half of North America's top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even 'the big one', a catastrophic earthquake devastating California. All he could think of was 'a revolutionary Marxist government in Washington'. That's not a likely scenario, yet the cost of insuring against it had shot up ten-fold. Normally one can buy $10 million of end-of-the-world insurance for between two and three thousand dollars a year. By early last November, the prices quoted were between twenty and thirty thousand, and even then it was difficult to buy in quantity -- at least, said the banker, 'not from anyone you trusted'.
Via Ken MacLeod, who comments: "You can insure against the revolution? Who knew?"
