Ever wondered what exactly it means when a country goes bankrupt? This Der Spiegel article about Ukraine, Hungary, Iceland and Venezuela on the brink explains. We’ve gotten used to hearing the phrase “too big to fail” bandied about quite a bit recently. The problem is that at the same time a concerted effort is being made to get cash-rich nations to recapitalize the IMF’s bailout fund (as if that weren’t scary enough), there are hedge funds (and probably sovereign wealth fund managers) that are literally waiting to bottomfeed on entire countries. How exactly, in a globalized capital market, do you convince capital to be charitable, when it stands to make a killing going for the jugular? I guess we’re about to find out.
