The Distribution of Pain - Maudlin / Ray Dalio

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...This likely-unrecoverable debt also appears as an asset on some lender’s balance sheet. It ends up
being sold as asset-backed securities, possibly to a mutual fund or pension fund near you. And it’s
generally in the high-yield category, with leverage on it.



At the risk of repeating the obvious, debt that can’t be repaid won’t be. Somebody will eat the loss;
the only question is who. Banks managed to socialize much of their losses in the last recession. I’m
not sure that plan will work a second time...



One Nation, Two Labor Markets



...One of the things I am realizing is that there is a distinction between what we have seen as the
working class and what I am coming to see as the service class.



A working-class person is
somebody who has a trade, and because of their skill, they can generally command a decent
income.
Then there is the service class – bar and restaurant workers, retail salespeople, general manual
laborers, and so on. These jobs are almost plug-and-play....



... because of the Obamacare
mandate, if you are a business with more than 50 employees, you simply cannot afford to have
full-time employees; so you resort more and more to part-time positions, which do not allow a
worker to earn an adequate wage.



...Health care being number one of the worry list? I think a large part of that is the fact that young
people are required to buy ridiculously expensive health insurance packages in order to subsidize a
sick elderly population....



...We are a nation that is increasingly under stress. Dalio talks about it in terms of the bottom 60%
versus the top 40%, but he could have made the same case using an 80–20 model or even a 90–10
model. I am reminded of Pareto’s 80/20 principle, which states that roughly 80% of effects come
from 20% of causes...