Debt Bomb

Bank X calls the U.S. home base but has branches and operations all over the world. Bank X’s CFO (let’s call him Joe) reports very publically that Bank X is kicking butt and expecting record-high profits for the fiscal year, despite the crappy economy that exists in the U.S.

It turns out that Joe’s predictions were way off and profits sucked because of a bunch of sketchy and/or defaulted mortgage loans and Bank X stock tanks. They’re running out of money and defaulting on their financial obligations. Think: Lehman Brothers meet Bear Stearns, circa 2010.

The bankruptcy of Bank X shocks the economies of the United States and the world as a whole. Joe and his crew at Bank X have successfully caused what is referred to as a debt bomb. It went off...then triggered explosions of gasoline on top of risky debt in 50 other venues, and the whole world looks like the last scene of Dr. Strangelove.