If you worry about financial Armageddon, it is indeed metaphorically the time to stock your bunker with guns, ammunition, canned food and gold bars.

What we need to understand is, one, that there are market failures; and two, that there are things like asset bubbles and irrational exuberance. There are periods of booms, bubbles, and manias. These things, if left to themselves, can lead to crashes, to busts, to panics.

In the history of modern capitalism, crises are the norm, not the exception.

If we didn't have greed, market economies wouldn't be as innovative as they are. But in my view, greed has to be contained by the fear of losses, so there has to be a system where, if you take too much risk, you go into bankruptcy. You don't systematically bail out people who take excessive risks.

I am just a normal human being - I am alive! Why is anyone surprised that I am human? Like many New Yorkers, I have a multifaceted life.

But in the financial markets, without proper institutional rules, there's the law of the jungle - because there's greed! There's nothing wrong with greed, per se. It's not that people are more greedy now than they were 20 years ago. But greed has to be tempered, first, by fear of losses. So if you bail people out, there's less fear. And second, b prudential regulation and supervision to avoid certain excesses.

Once you run current-account deficits, you depend on the kindness of strangers. This might be the beginning of the end of the American empire.