This article is a guest contribution from The Business Insider.
Joe Stiglitz and Hugh Hendry duked it out last night on BBC's Newsnight.
Stiglitz says that betting on a default is absurd. Hendry is betting on exactly that happening in Greece.
From Hendry's opening line you can tell this is going to be a good fight:
"Um hello? Can I tell you about the real world?"
Then the BBC anchor asks (at 7:28): "So you would see Greece tumble and the Euro currency tumble?"
Hendry: "Absolutely."
He goes on to say that it's recognizing the unsustainable debt and then Stiglitz cuts him off:
"That's absurd."
Watch the video after the jump. Here's a bit more transcribed:
BBC anchor (around 5:00): "But isn't the truth, Hugh Hendry, that if Greece defaults, that you, that hedge funds like you, make millions?"
"...Some hedge funds make millions. Yeah, the hedge funds who - hedge funds, speculators, and independent central banks are what stands between an economy and hyper-inflation.
"It's very hard to create inflation when you have free markets. When you have the discourse and dissemination of information.
"Look what happens - you get into difficulty and these guys over here [pointing at Stiglitz and Spanish Ambassador to the UK, Carles Casajuana] say, "hey we don't like it."
"Suddenly the truth hurts! Suddenly we want to abandon the truth. Suddenly speculation becomes a pejorative term!"
Casajuana: "No no no, we don't want to abandon the truth. We admit we have a problem..."
Video:
