Tuesday, November 25, 2008

The Bible on credit default swaps?

Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.
--Proverbs 22:26-27

He who puts up security for another will surely suffer, but whoever refuses to strike hands in pledge is safe.
--Proverbs 11:15

A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.
--Proverbs 17:18

Take the garment of one who puts up security for a stranger; hold it in pledge if he does it for a wayward woman.
--Proverbs 20:16 on the wisdom of demanding collateral when lending to AIG


Jess Austin said...

Can we really call any aspect of this travesty wisdom?

James Choi said...

Well, the wisdom part of it comes from the Bible (possibly) warning *against* underwriting credit default swaps!

HappyWifeHappyLife said...

Here's Proverbs 17:18 - Eugent Peterson's The Message translation - I feel it really speaks to the credit mess our country is in today:

"It's stupid to try to get something for nothing, or run up huge bills you can never pay."