Investor Jeremy Grantham, well known for years and around the world (he manages more than $100 billion) has recently come around to the idea that some mortgage debt forgiveness might be necessary. Given that Grantham invests in bonds from time to time, this is amazing stuff. Bond investors hate the idea of debt forgiveness. They usually prefer "debt repayment at all costs, or I get to take your stuff." I recommend reading Grantham's latest letter to clients, which you can find here, or perhaps my own, shorter riff on this and other matters from The Daily. It's interesting to see some of the more thoughtful members of the professional investment community coming around to the fact that the severe income inequality that has emerged in the U.S. over the last forty years is an actual threat to the system. Most of these guys are well placed at the top of the income heap so perhaps the ride towards inequality wasn't so bad for them but now people like Grantham and to a lesser extent PIMCO's Bill Gross are recognizing that it's tough for them to invest in, you know, businesses when their customer bases have been destroyed by the decline of American mass affluence. It's tough for them to invest in sovereign debt of the United States when the tax base has been so decimated that 47% of the people don't even make enough money to incur an income tax liability.