Too complex to fail?

[The2ndWheel]

http://www.energybulletin.net/node/46837

Much that has happened in the last few weeks in the markets was shocking in its swiftness even to the financially literate. But it shouldn't have been all that surprising. The explosive cocktail of too much debt and too little energy has now had the effect of toppling the already top-heavy world markets.

When the world economy was humming along, nary a thought was given to its enormous complexity. It is only now when it is disrupted that we are forced to notice where that complexity is breaking down. And, perhaps the biggest disconnect is between the scope of the problem which is international and the response which has been largely national. The cowboy capitalism which spread across the globe in the past 20 years is now looking for a marshall to come to town and straighten things out.

But there is no overarching international financial authority which can order countries to do anything. And the national approach is, of necessity, a political approach as Stratfor writes in a recent piece:

Countries do not want to bail out foreigners, and different governments do not want to assume the liabilities of other nations. The nature of political solutions is always that politicians respond to their own constituencies, not to people who can’t vote for them.