An Amazing Quality Of Life Enhancing Invention

We can only think about the possibility. Basically it started with 6 Million Dollar Man and then Robocop. The whole idea germination came to him when he read Asimov. Dreams visionary dreams. But he had to work his ass off to get to the current stage. To pinpoint how the brain signals control the various nerves dictating the motion. The invention is amazing for stroke victims, even paralysed patients to a certain degree. I believe he will be able to further improve it for dexterity and mobility. By using brain signals, it connects the brain to the sensors at various robotic joints, amazing. Its also commercially available but production is only 500 a year for now.

Dr. Sankai, who introduced the 'Robot Suit', something unfamiliar to the world, established CYBERDYNE Inc. in June, 2004.

TIME LINE

TIME LINE

1968

1968

Dr. Sankai in primary 3

What led you to the development of the 'Robot Suit'?

I read this book called 'I Robot' by Isaac Asimov, when I was in 3rd grade. There appeared a doctor and the robots that the doctor created. The doctor looked as if he was a magician who could create everything out of nothing to me, and always did right things, something beneficial to human beings. 'So cool!!' I though, and made up my mind to be a scientist who creates robots like the doctor when I grew up. I had locked myself in my room, and carried out odd experiments day after day. My brain was swelling with knowledge in electric engineering when I graduated primary school. There was a cartoon on the air at the same time, called 'Cyborg 009' which also influenced me very much. And now, I'm developing the 'Robot Suit' that has both advantages of a robot and a cyborg.

1975

1975

High school

Why 'Robot Suit', not a robot?

I have always been concerned with the relationship of human beings with technologies. Human only gets older and weaker after they grow up, and it is unavoidable. To be able to live a meaningful remaining time depends on the existence of technologies. I thought that to support human beings using technologies will improve the relationship of human beings with technologies. However, human bodies are filled with wonders. The bio-defensive system of the human body rejects everything that tries to enter the skin. Within the skin, or out of the skin. I had come to conclusion that the skin is the significant border. I tried to stick the technology on the border, the skin. That is the 'Robot Suits'.

1987

1987

Dr. Sankai hard working for PhD

How does the 'Robot Suit' work?

Faint bio-signals appear on the surface of the skin when the human brain tries to move the exoskeleton. The signals are detected and the 'Robot Suit' moves to support the action. The 'Robot Suit' moves the body of the human, and the information comes back to the brain. This interactive spiral loop of the human and the robot/information system is what I think, will be the core technology to develop the world of the next generation.

1998

1998

With Dr. De Baykey at Baylor College of Medicine

I'm sure you have come across some difficulties?

To achieve this cycle of the human and the technologies, I needed to overcome many challenges. Humans can feel discomfort when the 'Robot Suit' is added to the body, as it acts as a sensor, and also as equipment to control the whole body. This affects us both physically and mentally. To minimize the size and the weight was a big challenge, and the individual body differences needed to be considered as well. To attempt all of these needed knowledge not only in engineering, but in the fields like behavioral science, cranial nerve science, physiology, psychology and so on. Even if the 'Robot Suit' itself had completed, law, ethic and safety requirement needed to be met in order to contribute to the world. I strongly felt the need of an academic system that includes a number of fields combined. I have named and established this academic system, 'CYBERNICS'. The academic system 'CYBERNICS' is now chosen as an international base (Global COE Program) for the academic area. 'Robot Suit HAL' is the out come of sleepless research.

1998

1998

With lab members at Baylor College of Medicine

How do you think 'HAL' contributes to the world?

We are now aiming for mass-production of 'HAL' to be used in the medical and personal care fields. Rehabilitation, ADL, and caring support will be the application in medical and personal care fields. The workers working under harsh conditions could also use 'HAL' to support their work. The increase in the average working age caused by decrease in birth rate and aging might be eased using technologies like the 'Robot Suit'. To enjoy is as important as to work in order to live a happy life. 'HAL' is expected to be in full activity in the fields other than medical or caring fields like heavy labor support, the entertainment field and also rescue field operations. Engineering and medicine is meaningful if it helps human beings. To supply the leading edge technology to the person who really needs it, and to exploit the future by a hearty science technology. That is what I am aiming for, and I think that is the purpose of my existence. I will develop technologies that make people smile, and create a future world that nobody had seen before.

http://www.cyberdyne.jp/english/index.html

• "Robot Suit HAL" is a cyborg-type robot that can expand and improve physical capability.
• When a person attempts to move, nerve signals are sent from the brain to the muscles via motoneuron, moving the musculoskeletal system as a consequence. At this moment, very weak biosignals can be detected on the surface of the skin. "HAL" catches these signals through a sensor attached on the skin of the wearer. Based on the signals obtained, the power unit is controlled to move the joint unitedly with the wearer's muscle movement, enabling to support the wearer's daily activities. This is what we call a 'voluntary control system' that provides movement interpreting the wearer's intention from the biosignals in advance of the actual movement. Not only a 'voluntary control system' "HAL" has, but also a 'robotic autonomous control system' that provides human-like movement based on a robotic system which integrally work together with the 'autonomous control system'. "HAL" is the world's first cyborg-type robot controlled by this unique Hybrid System.
• "HAL" is expected to be applied in various fields such as rehabilitation support and physical training support in medical field, ADL support for disabled people, heavy labour support at factories, and rescue support at disaster sites, as well as in the entertainment field.

HAL-5 Type-B Speficications

Size

wearable robot
Height 1,600mm

Weight

Full Body Type approx. 23kg
(Lower body approx. 15kg)

Power

Battery Drive
Charged battery( AC100V)

Continuous operating time

Approximately 2 hours 40 minutes

Motions

Daily Activities( standing up from a chair, walking, climbing up and down stairs)
Hold and lift heavy objects
and more...

Operation

Hybrid Control System

Working Environment

Indoor and outdoor

Going Holistic, Organic and Vegan ......

p/s  Guys, we know we all watch Nigellea Lawson cook on TV, but why the food sound so sexy and R rated when she describes her ingredients and when she eats??!!

Attitude - The Critical Factor In Being A Success

I was surfing the net and came across this exceptional episode of 60 Minutes where they spoke to people, well kids really, whose family had lost their homes to foreclosure, and unemployment benefits ran out, losing almost everything they have, ... and having to live in a truck or a car because many of the shelters are already full.


You do not need a subprime crisis to find homeless people, people whose livelihood had been so broken up by things that happen around them. If you had not tasted hardships, you may not truly appreciate the things and people you have around you.


What is most wonderful is the attitude shown by the two kids being interviewed. Brings tears to your eyes to know some had to suffer so young. However, it is exactly that kind of attitude that I am sure will bring them success - monetary, relationships and career - in the near future. If you have kids, do your kids have that kind of attitude? Or like some, they just shrivel up into a cocoon, and blame everything around them for causing the misery ... 


I am not much for positive thinking therapy or those -rah-rah rallies by super salesmen to motivate us to excel and achieve. I believe if you have the right attitude, you can climb yourself out of any rut. The attitude that you alone can change your destiny, that you alone can make things better for yourself and those around you, that you alone is enough to make sense of the world again, and that you do not have to be a super human being to do all that. Just accept what life is now, and mark out where you want to be, and pinpoint how you are going to get there.


No one is going to gloss over it all, it will be long suffering at times when we are down, but no amount of self-pity will do anyone any good.


If our kids had that kind of attitude exemplified by the two kids in 60 Minutes, you can die happy knowing that they will do well in life.

You Will Never Walk Alone

Our hero has a voice and she is doing it for our future. Have you registered to vote? That's the least you can do for yourself and your loved ones.

Annie Ooi Siew Lan and Rosni Malan have pleaded with the king not to dissolve Parliament until electoral reforms have taken place.

Rosni’s husband, Baharuddin Ahmad, died from heart complications during the rally. Ooi, nicknamed “Aunty Bersih” was seen being sprayed with chemical-laced water cannons and tear gas during the rally.

They are asking the king, Tuanku Mizan Zainal Abidin, to use his discretion to not consent to Parliament’s dissolution anytime soon.

Speaking on their behalf, their lawyer M Visvanathan said: “What we’re trying to achieve is to put enough pressure on the powers-that-be, especially the Yang Dipertuan-Agong, to invoke his discretion. He does have the discretion, it should be exercised in this case.”

“It is not a demand…(We ask) that the Agong use his discretion not to dissolve Parliament.”

http://www.petitiononline.com/petitions/per2011b/signatures

2 Cellos

Bought tickets to Elton John late as I had already seen him twice but that was some 15-20 years ago. As the date drew closer, I saw his photo performing in Singapore and naturally he has aged, and I said to myself, "do you think you will catch him live again over the next 10 years ... how old would he be then?"


For someone whose career spans over 30 years, the audience will be made up of different groupings. There are those who loved him from day one and would appreciate his Madman Across The Water and Levon, or even Honky Cat. Then there are those who got in in the 80s with his Sacrifice, and then the last ten years or so with the Lion King. Hence there will be gaps in appreciation in his concert.


Still, he gave an earnest performance and you cannot begrudge his brilliance as a songwriter with everlasting tunes such as Your Song, Rocket Man, Sorry Seems To Be The Hardest Word, Daniel, Candle In The Wind, Goodbye Yellow Brick Road, Crocodile Rock, Saturday Night's All Right ... so glad he did The Bitch Is Back (thought that was too risque). 


I can go one with songs he should have done: Island Girl, Don't Go Breaking My Heart, Empty Sky, and his brilliant instrumental Song For Guy ... but he could only do so much.


Anyway, he introduced the 2 Cellos as his opening act, and they were brilliant, have a listen.

Liquidity Creeping Into The Markets

One sure fire way to anticipate a bull run is access to liquidity. I have been hearing this more than a couple of times over the past two weeks, bankers are flying in from Singapore and HK to offer decent loans to listed corporations at highly undemanding rates.



The last 6-7 years saw much of the liquidity in Asia gravitating towards supporting property loans. Hence equity markets did not get much of a boost from the excess liquidity in the system. There has been a dramatic shift in property outlook in HK, Singapore and Malaysia. Most have gone neutral or hold from buys. What that means is that banks are too flushed with liquidity and have to keep them working.

Local banks are doing the same but apparently the foreign banks are a bit more aggressive. Ringgit loans of RM50m to RM300m can be had at 2% or 3% below BLR. The juiciest one is USD loans can be had at just 0.1%. Many of the top tier companies do not really need the funds, so the bankers are going second tier and soon I think not so blue companies as well.


The natural chain of events would be that once they take the loans, they have to put it to work, usually expansion or asset acquisition, hence more corporate developments. I see this as the beginning of a bull run cycle and it would probably take another 2-4 months to ripen.


Liquidity is a massive force in charging a bull run. You have been warned.

An Acoustic Evening With Richard Marx

Richard Marx is coming to town to serenade you and I at Arena of Stars, Genting Highlands this 11 December 2011!

“An Acoustic Evening with Richard Marx – World Tour 2011”will be Richard Marx’s only concert in Malaysia in more than 10 years!

Hurry! Don’t miss the chance to enjoy a romantic evening with your loved one, listening to everlasting ballads such as “Right Here Waiting”,“Now & Forever”, “Endless Summer Nights”, “Hazard” and many more.

Interested? Then contact the representatives below to book your tickets NOW!

June Fong

03-5623 8941 or june.fong@splendid8.com or askus@splendid8.com

Shaun Chin

03-5623 8988 or shaun.chin@splendid8.com or askus@splendid8.com

Websites:

www.splendid8.com

www.facebook.com/splendid8

Jess Lee Jia Wei's Album Finally Out

Jess Lee's album is finally out. Ar first there were gossips that the record company would be freezing her. But, OMG, the music video of her single was banned in Singapore and Malaysia, although you can still watch it at Red Box or Neway. Vierw it and you will know why, what a daring production, of course this is not Jess' idea I think, probably some smart marketing producer. If they ban you, it will go viral.

Or as some who has viewed it said: "This reminds me never to bang emo chicks".

Love the one word titles in English: "Suffering" and "Burn", well "Poll-Out" is also short enough. WTG girl!!!

We Should Be Watching China Instead Of E.U.

As mentioned before, China is a more important economic influence on Asia. It is safe to say that China is having some issues, some quite seemingly insurmountable. How to engineer a soft landing for the few pockets of overheated industries? That is the key. If cracks start appearing larger, it could overwhelm Asia. ... and Australia will be hit really really bad.



Pundits have heralded China's stimulus programs as an effective model for other countries to emulate.  However, the Chinese government has lit the fuse of its own implosion and many analysts have made the mistake of comparing Keynesian apples to bank lending oranges. As the flow of credit slows,  China will not only risk an economic collapse, but a political one as well. It seems a matter of when, not if.


Instead of China's government pumping printed or borrowed money into the economy, its stimulus funds have come from bank lending.  estimated that   2011 financing will hit 17.5 trillion-18 trillion yuan ($2.7 trillion-$2.8 trillion), more than a third of China's entire GDP. Financing for 2009 and 2010 equated to more than 40% of GDP.


The credit push has lead China to consume more than half of the world's cement, 47% of the world's coal and 48% of all iron ore. This, for a country whose GDP is just 10.7% of the entire global economy and hundreds of millions wallow in poverty.


Sustaining the credit expansion in an attempt to prevent a recession has built the world's largest house of cards. Estimates have put the number of vacant apartments built as high as 64 million. Entire ghost cities have been constructed and sit virtually empty. The homes are simply unaffordable.  In the commercial sector, China holds the record for the world's largest shopping mall. Currently it is 98% vacant. 

China's real estate bubble, one of the few remaining, is losing air at an astonishing speed. In just the past few weeks, hundreds of real estate brokerages have shuttered and thousands of workers have been laid off. The private SouFun Group in Beijing announced that the number of transactions fell by more than half in six of the 35 cities it surveyed just this month compared to last year. At least some declines were seen in 80% of the cities it surveyed.


The real estate slowdown has put pressure on copper prices around the globe, dropping more than 20% from a recent 2010 peak. Beijing is trying to curb inflation by slowing and in some instances limiting the credit available. Chinese firms have been using copper as a financing tool.  Stockpiling and using copper as collateral allowed many firms to obtain credit outside officially sanctioned channels. While many saw strong demand for copper as proof of a stable economy, at least one research firm has been told by their sources that almost all of the copper imported in the past three months has been used for these financing purposes, not for building


As the demand for copper subsides, prices will invariably decrease. The copper used as collateral will no longer be enough to service or guarantee the debts of numerous firms. Inventories of the metal will have to be sold. If the price of copper tumbles quickly, an entire portion of China's economy could collapse. Even Beijing will have problems propping up the price of copper with all its other troubles.


Beijing has been forced to close off sources of easy credit to keep inflation from running rampant. The tightening brings copper to a tipping point where massive business defaults could occur, pushing prices even lower. In turn, the slowing of China's real estate market could be pushed into a freefall that makes the rest of the world's problems look miniscule. Pile all of those potential economic disasters on a poor and angry populace seeing success in fighting government for the first time in decades and the outcome will be anything but stable. In fact, China may not be the largest country on the planet for many more years. What was once called China could be dozens of smaller states fighting for the scraps left after the fall of Beijing.


Hedge fund manager Jim Chanos,  who is known for profitably shorting Enron prior the company’s collapse, recently predicted an upcoming crash in the Chinese economy and a collapse in the Chinese real estate market


Chanos notes that although the central Chinese authorities in Beijing have been attempting to slow what appears to be an overheating economy down for quite some time, local government officials have stymied the cooling efforts.


According to Chanos, many local officials are continuing to sell real estate to developers, often with the use of risky leverage. These actions are currently fueling a massive property bubble in the growing economy.
Likewise, noted economist Nouriel Roubini  has also predicted a “hard landing” in China.  Roubini at a recent investment conference in Singapore, stated that there is a “meaningful probability” of a hard landing in China after 2013. Roubini bases his prediction on the fact that investment now makes up more than 50% of China’s GDP. According to Roubini, previous cases in which this phenomena have occurred (like South-East Asia in the mid 90s) have resulted in disaster.

The Empire Strikes Back

Yea... finally can get my favourite coffee and macarons .... plus must eat at SERAI again, the food is very good, a bit Madam Kwan-but with a Malay bent, I love it.


Oh, for their reopening, ESG will give a RM10 ESG voucher for every RM50 spent at any ESG outlet!!! From 15th Nov till 18th Nov only!!!


Though I have not been paid by Empire Subang to write this, its easily my favourite shopping mall, small enough and fun enough ... and usually parking is not a problem UNLIKE at MidValley where the job is to look for somewhere to park illegally.


Anyway, made my way to town center today as I had a diabolical craving for my favourite chilli fish dish at Jalan Pudu. The place is manned by (or should I say womanned) two sisters, its right opposite Goggles Holdings building (not Google OK). I can eat one whole fish myself (meant for 2 or 3), its a river fish hence it has a mild muddy taste to it but the ginger, garlic and overdose of chilli makes it all worthwhile and highly addictive.


Look at the dish, it looks so unwelcoming but its very solid, be prepared to wait 40 minutes if you arrive before 12pm or after 1.30pm ... anything in between wait for 1 hour at least.

Taking The Euro Crisis In Perspective

It is daunting and mortifying trying to take into account whats happening in Greece, and then Italy... and I am sure Spain is next. Markets will be volatile in the coming weeks and months. The big TARP-like fund is critical to stabilising the region, so hearsay and rumours about some disagreements over it will always spook the markets.




However, we also should know that the EU have its backs to the wall. If they let Greece out of EU and the euro, that will trigger an avalanche because nobody will offer any haircuts anymore - lending rates will soar for troubled European nations and their sovereign bonds will plummet, forcing the troubled ones to get out as well ... the consequences are too dire to reverse everything.


The disagreements still have a long time to go to be ironed out as the fund would only come into effect mid-next year, so they have a lot of time to agree to disagree for sometime. Its just grandstanding, each side trying to get the "safest" deal for their governments and affected corporations.



Hence we have to learn to live with the volatility. But we also have to find out for ourselves just how dire the situation can get. To get a better perspective, lets look at trading between China and its major partners (annually):
imports from HK $10bn, exports to HK $227bn (51.3%) 
imports from South Korea $143bn, exports to South Korea $72bn (24.5%)
imports from Japan $183bn, exports to Japan $125bn (21.8%)
imports from Australia $62bn, exports to Australia $29bn (22.5%)
imports from the US$106bn, exports to the US $296bn (14.9%)
imports from the EU $176bn, exports to the EU $325bn (13.9%)
imports from Malaysia $25bn, exports to Malaysia $52bn (17.9%)
imports from India $22bn, exports to India $43bn (11.4%)
imports from Brazil  $40bn, exports to Brazil $26bn (14.9%)
imports from Singapore $26bn, exports to Singapore $33bn (11.1%)



If you take the time to go through the figures, you will find that China is a much bigger partner for most nations. Yes, the EU is important but not terribly so. It would be devastating for Asia if problems similar to the EU-crisis were to hit China.


Hence we can surmise that China may take a minor hit from the current situation but there are plenty of others to take up the slack. Look at Brazil, its importing a lot more there than exporting to Brazil, and you can extrapolate that for the rest of Latin America, which is to say Latam will be taking up a lot of slack for the next few years to keep China chugging along.



The percentage figure in parentheses are the percentage of trade with China by that specific country. Without China, HK is basically kaput, but Japan, South Korea and Australia are potential big victims in a China calamity.



In that perspective, we may be able to reassure ourselves a bit more that most of the rest of global markets have "already fallen in sympathy" with the EU crisis. Any further shocks from the EU will tend to affect EU markets a lot more than the rest. 

Danny Chan Tribute Concert @ No Black Tie

Date: 9 & 16 November 2011
Time: 9.30pm
Cover charge: RM40

Danny Chan tribute concert with singers Winnie Ho, Z Yan, Lydia Chew, Jeffrey Lim and Worm Lee.
All the singers are backed by Music Director Tay Cher Siang’s WVC Trio + 1, one of the most talented jazz trios in Malaysia.

Come by for a night of nostalgia and fun as these singers take you through a musical journey of Danny Chan’s music.

Bookings are a must, call after 5pm 03-21423737.

At The End Of A Rainbow

I finally got to watch Andy Lau's Days Of Tomorrow, a trifle over dramatic and some over acting, but the modern day flashback mode brings forth a wonderful movie. People living desperate lives by the choices they made at a critical juncture of their lives. Its why we care for those who would never cry for us, and why we cry for those who would not care for us, and yet ... we too do not care for those who cry for us - the sad realities of life, sometimes taking a lifetime of wasted anger to dissolve, ... taking a lifetime to cherish a fleeting memory. 


I have embedded the ending of the movie and the final minutes ending with a most wonderful song: At The End Of A Rainbow by Earl Grant. If you wish, you could search for the whole movie on You Tube. Its worthwhile.

And Now For Something Completely Different ...

I only like Andy Lau in movies. I am so thankful to be able to say I have never bought even one album of his. All his singing fans really are die-hard fans. Discovered this by accident, enjoy ... love the slang/intonation with certain Malay words, certainly did not study in Malaysia.

What If Greece Defaults

Naturally, Sarkozy must be incensed with Pappy deciding to call for a referendum on the Euro package. This is like you have a relative who is being hounded by loan sharks, so much so that all your other relatives got together and put up a decent package, with a 50% haircut on the debt that the loan sharks have agreed to .... and then to discover that the low life relative may not want the rescue package. Not that he.she has any alternative, I guess he/she does, in not paying at all.

Pappy surprised everyone by declaring the referendum but you cannot call a referendum on a fiscal matter. You may frame it like "Are you in favour of the Euro rescue package?". Pappy is on a double edge sword, barely able to maintain control, I guessed his thinking is the referendum might do one of two things. A YES, he will get control and political will to push through the reforms and possibly save his political career. A NO, he will be out anyway. However, if he goes ahead with the Euro plan without a referendum, he knows that he is bound to be faced with huge strikes, revolts and riots anyway ... which may cause an early fall in politics for him within weeks of implementation.


The key question for us in Asia is how would that affect the markets. There should be an initial knee jerk sell down for a few days, but thankfully the US, Asia and Latin America are not really involved. Yes, there will be indirect hits but the markets have discounted a Greek default a long way. That's why markets shot up like 5% on news of the Euro package. Now we have to give that all back.

A Greek default would be much larger than other recent defaults, like the one in Argentina in 2001 or Russia in 1998. Greek public debt now comes to about $500 billion. Argentina’s debt when it defaulted was $82 billion, and Russia’s was $79 billion.

The size of Greece’s public debt assures that the consequences of a Greek default would ravage the Greek economy. Inside Greece, banks would face huge losses on bonds in their portfolios and would have to close their doors until somebody recapitalized them. The thing is that the men and women on the streets of Athens only focus on the hardships in job losses and pay cuts. When all of your banks close shop, you will see a greater hit on the real economy via hoarding, unrest, hyper inflation and a dire scarcity of goods and services.

The economy would grind to a halt. Some projections put the contraction in the gross domestic product at more than of 25%. ATMs would stop working. Business credit would dry up, and businesses would shut their doors. The government would be unable to pay its bills.

But the damage wouldn’t stop at Greece’s borders. Bond buyers would flee Italian and Spanish government bonds, requiring the European Central Bank and the European Financial Stability Facility—if it’s set up by then—to pour billions into buying those bonds to support the markets.

European banks would take a huge hit as the value of Greek government and corporate debt in their portfolios plunged. Big banks and insurance companies in Germany had a total exposure of $33 billion to Greek government and corporate debt as of the end of March, according to the Bank for International Settlements. French banks had exposure to Greek public and private debt of almost $80 billion.

That exposure is not spread evenly. In France, much of it is concentrated at three big banks: Crédit Agricole, Société Générale, and BNP Paribas. In Germany, the government set up bad banks as part of its bailout of Hypo Real Estate Holding and WestLB. Those bad banks hold more than half of all the Greek debt held by German banks, and would undoubtedly need another infusion of taxpayer cash.

Exactly how far the damage would go depends on the degree to which bond markets would punish the bonds of Portugal, Ireland, Italy, and Spain, which, along with Greece, make up the so-called PIIGS group.

The exposure of US banks to Greek debt alone is relatively small. But US banks have $670 billion in exposure to all five of the PIIGS group. And it depends on whether a default would force Greece out of the euro. That’s not an inevitable result. Greece could default on its huge debt to banks, but pay its relatively smaller debt to international creditors such as the International Monetary Fund, the European Union, and the ECB.

Those institutions might even see a capital infusion into Greek banks—along with a process that rolled up bad banks under new, perhaps overseas ownership—as a better alternative than the end of the European Monetary Union.

The consequences of a collapse of the euro would be huge on even a strong economy such as Germany's. UBS estimates that a collapse of the euro that left Germany on its own could produce a loss of as much as 20% to 25% of German GDP in the first year after a breakup.

Those scenarios seem so grim that it’s hard to imagine any rational politician steering his or her country into that storm. And that’s been the strongest argument—one that I’ve made on more than one occasion—for saying that Greece won’t default and that Europe will figure out a way to rescue the country from its debt spiral.

There is another way to look at the “Why would Greece default?” question. IMF economists studying past sovereign defaults came to a conclusion that turns any approach to answering this question on its head. It turns out that in past defaults—including defaults by Argentina, Ecuador, and Indonesia—a country defaulted when it saw that a default was in its best interest.

Greece needs more money than first expected, and may not be able to produce the deep spending cuts, tax hikes, and sales of public assets necessary to qualify for bailout money. Economic growth that's worse than forecast is making targets even harder to meet. With Greek citizens irate, the internal pressure to escape from brutal austerity measures may become overwhelming. 

If Greece caves, then the bailout payments would stop and Greece would run out of money, forcing it to default on billions in debt. Many taxpayers in Germany and other European nations would welcome that, since they're sick of sending money to spendthrift neighbors. But a Greek default would punish many of Europe's biggest banks, since they're the ones holding the debt. If Greece defaults, investors would fear the same thing from Ireland and Portugal and perhaps even from Italy and Spain. That's the meltdown scenario investors fear, and nobody's sure how bad it would get.

Europe's woes are similar to the U.S. subprime crisis that percolated for a couple of years, then erupted in 2008. Greece and other overindebted nations are like huge subprime borrowers who spent more than they could afford by racking up debt they now can't pay back. Like big U.S. banks during the housing boom, many European banks had shoddy underwriting standards and bought debt that was far riskier than they realized. A Greek default could be the European equivalent of the Lehman Brothers bankruptcy in 2008, which started a run on the whole U.S. financial system.

But there's a key difference between the United States in 2008 and Europe in 2011: American officials promptly came up with TARP, the Troubled Assets Relief Program, which allowed them to inject capital into banks that would have imploded without it. In Europe, it's far harder to devise a systemwide financial bailout, since there's no centralized fiscal authority comparable to the U.S. Congress or the Treasury Dept. So every bailout maneuver requires negotiations among 17 sets of politicians, each answerable to restive taxpayers and rival political parties in their home nations.

The European bailouts are now faltering because politicians there can't muster a bazooka. Instead of a huge, open-ended commitment to do whatever's necessary to save Greece and preserve the Eurozone, Europe has come up with piecemeal solutions meant to buy time and delay the day of reckoning. That's why edgy markets react wildly to small-bore pronouncements that might signal more or less political resolve.

European politicians won't say so, but they're basically stalling for time as they wait for the enactment of a stronger, TARP-like bailout fund that would be able to cope with the ramifications of a Greek default. "An eventual Greek default seems certain," writes Mark Zandi of Moody's Analytics, "but European policymakers must provide enough financial aid to ensure that it happens after it is no longer a macroeconomic threat." Instead of the roughly $605 billion that's been pledged so far, he thinks it could take about $1.4 trillion. 

Meanwhile, investors are scrambling to protect themselves and gauge the impact of a European financial crisis. Here's a broad outline of that would happen if Greece defaults:

Government takeovers of European banks. French banks have the most exposure to Greece, and severe losses could basically force the French government to nationalize the banking sector which has happened before. Shareholders would be wiped out by nationalization, which is why shares of big French banks like BNP Paribas and Societe General are down by more than 40 percent this year. If France did it, other nations probably would, too. 

EuroTARP. First, there would be a newer, more flexible bailout fund that European parliaments are likely to approve by the end of October. That would be the TARP equivalent, and it could be used to inject money into banks as well as to bail out specific countries. If bank bailouts happen, the European Central Bank might also go on a bond-buying spree similar to the Federal Reserve's "quantitative easing" programs that ran from 2009 through mid-2011. If it worked, that would stabilize the market for European sovereign debt and boost the value of stocks and other risky assets, just as the Fed's QE programs did for awhile in the United States. If Europe really got its act together, it would also announce a plan to create a unified fiscal authority able to issue "eurobonds" that would help all member nations raise funds, make tax policy, and exercise real fiscal authority over member nations. It would take years, maybe decades, to enact such a bureaucracy, but a credible plan to do so might reassure markets.

A smaller Eurozone. If Greece defaults, that would probably mean the end of its membership in the Eurozone. The drachma would return as Greece's currency, and Greece would set its own fiscal and monetary policy without having to answer to bailout masters in northern capitals. Of course, Greece would be out of money and unable to borrow, so its economy would get hammered. The drachma's value would be very low against other currencies, which would make Greek exports cheap and help reduce unemployment. But imported goods would become vastly more expensive. Martin Hutchinson of Reuters Breakingviews estimates that Greek living standards would decline by 30 percent or more. Great Depression-style bank holidays may be necessary, to prevent people from withdrawing all their money. Other debt-laden nations could follow Greece out of the Eurozone and take a chance on default, but the economic pain in Greece might also produce popular support for more thorough austerity measures meant to remain part of the club. Foreign tourists, it's worth noting, would benefit from default, since travel to Greece or any other nation kicked out of the Eurozone would suddenly become one of the world's great bargains.

A fresh European recession. Measures needed to stabilize Europe's financial system would most likely curtail lending and other economic activity, as banks beefed up their capital reserves and dealt with writedowns. Several countries would also need to hike taxes and cut government spending, to cover losses caused by defaults. Many companies and even some countries would see their credit ratings downgraded, which would force them to pay more to borrow money. Europe is already on the verge of recession, and wider austerity measures would probably clinch another downturn.

A ripple in America. "Europe's problems pose a serious threat to the U.S. economy, but not necessarily a mortal one," says Zandi. Unlike their French and German counterparts, U.S. banks own only a tiny portion of the debt issued by the most troubled European nations. American banks are also in much better shape generally than those in Europe, thanks to the aggressive action in 2008 and to the 2009 "stress tests" that forced many of them to raise more capital and strengthen their balance sheets. Big U.S. companies are also healthy, with strong profits, and few if any are dependent upon European banks. Still, a recession and financial crisis in Europe would weaken demand for American goods and services in one of the world's biggest markets, at a time when the U.S. economy is struggling, too.

A stronger Europe, someday. Traders focused on the short term have a lot to worry about, but Kirkegaard argues that the mounting crisis in Europe may be the only way to create the stronger fiscal union needed to forestall or address the kinds of problems that are tearing Europe apart. "Reform is only politically feasible in the midst of a crisis," he says. "It's going to take quite a long time, but the odds are good that this crisis will not be wasted, and will in fact be used to solve long-term institutional problems in Europe." So if your investment horizon happens to be a decade out, Europe might just turn out to be a good bet.