Discussion in 'Professional Trading' started by crgarcia, Mar 9, 2009.
This crisis proved that Business Schools and Finance/Economy Universities are worthless?
If that is what you are asserting then you couldn't be more wrong. This crisis proved that, once again, fear and greed take over in the human thought process. The idiots at the tops of the banks completely ignored risk management and now we see exactly what happens when you do that...a major blowup.
All the finance books written before this crisis are useless
Isn't that the point of the original post though? These guys were all supposidly trained by the best business schools and they "completely ignored risk management".
Might not be the schools fault, but it makes it look like their students don't retain the lessons they are supposed to have learned.
There are 2 things this crisis has made clear and that is that the following statements have been disproved:
Efficient Market Theory dictates the market is efficient
Traders provide better price discovery
Not really, in my respectfully humble view. This demonstrates that it only takes a few people with enough power and greed to ruin it for everyone else. Been happening since the beginning of time.
Think about it, the individuals who are most in the wrong had monetary incentives and golden parachutes out the wazoo. People do a lot of crazy things for money and often times care little about the consequeces to others.
Crisis has also shown [proved?] the worth of technical analysis... Do they even teach it in B school?
all it has proved is that finance is not a science..
something alot of smart people forgot in the past 10 years.
Higher business and economics education may not be worthless, but it is certainly dangerous when the grads move into positions of power too quickly in gov't and financial firms.
This crisis hasn't proven anything relevant to this post. This crisis has revealed that the major world banks have been insolvent since the mid 80's, but have been propped up by ponzi finance. Then, inflation got out of control and the world central banks thought they could reign it in without popping the bubble, since they have done it for about 30 years successfully. But, this time, the 600 trillion derivatives market collapsed. The US government may not be able to absorb the losses that it will take to revive the banking system, unless the whole world intervenes. What we have learned is that banks cannot chase profits at the expense of the real economy for long without causing a catastrophic failure.
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