[lbo-talk] Prescience

[Andy]

So I just finished Eugene Linden's Winds of Change, on how climate
change effects civilizations past and present.  He doesn't make a
super-strong case for ancient civilizations -- probably because so far
there isn't a super-strong case to be made -- and he leans heavily on
Mike Davis's work on El Nino precipitating famine around the Indian
Ocean in the late 19th century.  He does make a cogent if brief case
for how it can complicate our current situation.  Not bad overall.
But what really surprised me was in his account of the American
southwest, where regional climate prediction tends to line up moreso
than most places, forecasting drought:

[quote]

In Southern California, many homeowners have very little equity at
risk because banks have been willing to finance nearly all the costs
of buying homes.  Will banks continue to do so if prices start to
stall, or if insurance companies balk at insuring homes in high-risk
areas?  And what would happen to the banking system if banks become
suddenly saddled with a huge increase in non-performing mortgages and
unsalable properties possessed through foreclosure?  With no cushion
and no buyers, foreclosures would quickly propagate back up through
the financial system.  Because mortgages have been sliced and diced
into so many derivatives, the crisis could quickly become systemic as
investors fled markets.

[end quote]

The book is copyrighted 2006.

-- 
Andy