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

3 comments:

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."