The awesome exertions of the global banking system to evade the mandates of reality finally yield in a sickening slippage to epochal unwind. What a bad idea: to try to juke nature itself. In case you weren't paying attention over the weekend - and who really wants to? - the cosmic Brinks truck of free money went over a cliff, and the darn thing will keep free-falling until (at least) the American markets open again on Tuesday.

So, everybody and his uncle over in Europe got a sovereign debt downgrade and now the math changes for all the pretend bail-outs and back-stops that had been so exquisitely rigged through the long, nauseating autumn. Math is an annoying representation of reality, but hard to argue with. Bail-outs and back-stops finally became unaffordable even as poetic constructs.

Thus, we also approach the dreaded inflection point for the credit default swaps. Nobody believes that this Mount Everest of jive bond "insurance" can actually pay out, since the first instance of any attempt will bankrupt everybody. And yet there are the holders of all that paper who will object to, say, an 80 percent haircut on their Greek (and other) bonds. Surely some of them will try to invoke their CDS contracts. What then? Three possibilities that I see: 1) all parties and counter-parties go down the drain faster than you can say Benedict Cumberbatch; 2) all parties declare in unison that CDS were a prank that should now just be ignored, as if the cast of Downton Abbey showed up naked at the dinner table; and 3) every sort of loan on God's Green Earth is instantly re-priced and the entire world turns into a flea market. How will America do with its stock of slightly pre-owned Dunkin' Donuts stores, a million-odd Elvis lunch-boxes, and all those old videos of Friends? Don't you wish you'd invested in some hand tools?

In the background of these grave machinations lurks the tragedy of Iran. Subtract the Islamic maniacs who seized the levers of government there thirty-three years ago, and you'd actually find a perfectly modern society, complete with industries, skyscrapers, highways, TV shows, and people eating nice food in restaurants. One can understand why the last Shah was hated and resented. But here you now have a whole class of despotic maniacs much worse than the Shah ever was and they cannot be gotten rid of. Worse, they are devoted to exacting vengeance on the USA and its kindred western nations.

This may be just a tragic case of collective psychological scripting, but it is tending in the direction of a full-dress play-out. Our government believes that their government is determined to build an atomic bomb. Iran's government says, over and over, "...what an idea...!" The trouble is, our guys don't buy their vaudeville act. They will not be allowed to have a bomb, and that's all there is to it. We are doing everything short of all-out war to prevent it, but let's face it, a lot of these things could be construed as acts of war: Stuxnet attacks... blowing up nuclear scientists in their cars. These things are making already-crazy people even crazier, and more reckless.

If events continue down this path then there will be some action in the Persian Gulf. The oil markets will be thrown into disarray. Iran may sink a US navel vessel or two, but we know about their sunburn missiles and we won't put the whole fleet in harm's way, and before too long we will fuck them up very badly. The Iranians are capable of busting up a lot stuff in their neighborhood even as their air force is vaporized and their electric grid goes down. They could launch missiles into the Saudi Arabian oil terminals, for instance. Surely they will try to rain hell down on Israel. That would be a recipe for turning Teheran into an ashtray and a terrible tragedy for those otherwise normal Iranians who are not religious maniacs who wanted nothing more than to raise their children and once in a while go out for a nice lamb dinner.

I don't see any percentage in China and Russia coming into this rumble, though more than a couple of European nations may want to forget their troubles for a moment and, at least, cheerlead from the sidelines.

The result of all this - if the action doesn't get totally out-of-hand - is sure to be a gigantic step down in worldwide energy consumption, trade, and advanced economic activity. It would make the Great Depression look like a sit-com. The American suburban nexus would fail in a matter of weeks. The USA would have to commence the greatest work-around the world has ever seen. In the event, governments everywhere are liable to fall, even here, with elections postponed. There will be little in the way of real money to repair all the things that are falling apart.

Most amazing of all is how quiet the world scene has been, really, since 2001. The buildup of tensions must be out-of-this world. Something had to give.