For those of you too young to remember the Carter years you are watching a replay as we speak. Stay tuned.
That's true, but I would suggest the lack of transparency isn't really the issue because, well, everybody knows there's a lack of transparency. A more fundamental issue, IMO, is that so many people are (and were) ignoring the risk from associated with lack of transparency. In no small part this is because they're playing with someone else's money, but it's also because so many have been assuming that if the shit hits the fan, there is an implicit taxpayer backstop. And guess what - it turns out they were (more or less) right. You can see this behavior happen in real time right here on ET, where some of the loudest critics of bailouts and "jewish bankers" etc are the same ones chasing high bank yields comfortable in the knoweldge FDIC is going to save their bacon. Even though there is a CLEAR correlation between high bank yields and impending problems at said bank. There's nothing wrong with taking a flyer on an "opaque" investment - it's when the position becomes significant in size/leverage and thus by definition becomes unhedgeable that it's an issue.
Of course, the guys at AIG, Citigroup etc. - in this analogy, the "men of the mind" who are going on strike - are the failures. They should lose their jobs and the institutions should be liquidated. The real "men of the mind" in finance are guys like Ray Dalio, John Paulson, George Soros, Warren Buffet, and the owner/operators of the thousands of stable American banks. If only we'd let prices for the toxic crap fall low enough, competent fund managers would step in to buy. If only we would let the failed banks go under (with the usual FDIC intervention) then healthy regional banks would love to pick up Citibank and BofA accounts and branches on the cheap.
I completely agree with you. I once wanted to be in investment banking before I landed in energy trading. Now I truly would like to add value and do something in industry. If I keep with the trading route at least I am adding liquidity and possibly helping companies manage their risk. There is at least some value-add here versus simply taking a small slice of a very large pie and passing it along, adding no value whatsoever.
you just figure this out? the diff is this. for the most part, traders risk only their own wealth. if they fail, its out of their pocket, not the taxpayers. we have too many scumbags playing heads I win , tails you lose at the banks. This includes ALL house traders.
But having said that there is some value in Mergers and Acquisitions and some value in helping companies raise money. All the securitization of mortgages, the CDS disaster, and 30 to 1 leverage to make the quick buck was what really pissed me off. Those fuckers knew exactly what they were doing and they knew this was going to happen eventually.
i think it's obvious that Rand would not have supported the bailouts. Bailouts have no place in a capitalistic society. Frankly though your list of "men of the mind" is amusing. Both Soros and Buffet are ultra liberal, big government proponents. Rand on the other hand thought that government had limited purpose, like national defense for instance. An example of "men of the mind" would be John Allison IV, Chairman and CEO of BB&T, the 14th largest financial holding company in the US. Interestly he sent a letter to every Congressman and Senator during the TARP hearings, against TARP. He claims that Atlas Shrugged is the best defense of capitalism ever written, and requires all senior executives of his company to read it. OldTrader
All I'm really concerned about is whether people know what the hell they're doing. I don't see what a man's politics has to do with his business or financial acumen. I covered Allison with the "owner/operators of big banks" bit. Would it surprise you to learn that I've got a large position (for my account size, and for the portion of my account that I'm currently risking in stocks) in BBT?