I'm a rock star among geeks, wonks, and nerds.

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.

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.

You have to eventually nationalize US banks, you have to take the problem by the horns. In my view actually most of the US banking system is insolvent.

Having spent 10 years studying emerging markets, I know that you have patterns repeated over and over again. A bubble is like a fire which needs oxygen to continue... when you see there is no oxygen, things change.

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.

All the risky things that were happening back in ’06 and ‘07 are back again to the same level, if not more. So we are in the beginning of a credit bubble, but just the beginning.