The thing to do would be to let the giants fail and just guarantee everyone's 401k, bank account, credit card debt and mortgages…

Laurence Glazier adds:

How about educating people about the true risks of buying property on loan, and explaining how it is only the assumption of government intervention to remove risk that supports a belief in this golden calf, the obeisance to which diverts many an artist from their element and muse.

And what happens to the giant firms of Wall Street is immaterial now. Trading is being democratized, moving from the ivory towers to empowered individuals, as computers did twenty years ago. One of those big waves.

Nigel Davies is sceptical:

GM NigelWhat if there is no solution, and that this whole business is merely evidence of a fatal flaw in humanity. As far as I can see EVERYONE could have acted differently at some point so as prevent this, but instead they drifted en mass along a line of short term apparent self-interest.

And what if the 'rescue plan' itself is of a similar ilk, putting off paying the piper because 'something' had to be done. After all, those making this decision couldn't possibly have their careers tarnished by a huge crisis in their time. Better to defer it to a future generation/generations, eh?

BTW, at the chessboard such thinking is heavily influenced by an excess of caffeine, so I wasn't joking about the Dr Pepper/no sleep thing. People ALWAYS try to force matters when tired and on a caffeine high.

James Sogi ponders the situation:

It is out of our hands now. Rather than trading fundamentals or quant strategies we are left waiting to see what the politicians do and jerk around with that mess as this or that secretary or politician plays their stupid game while the world markets hang in the balance. This is the problem with too much power in too few hands.

Victor Niederhoffer replies:

Yes, but all that happened was in the numbers to start with and would have happened the same way regardless, as will the eventual aftermath.

Vincent Andres replies to Nigel Davies:

Maybe not a fatal flaw in humanity, but a fatal flaw in the part of humanity which has to deal with money ?

Human societies need a blood system. Money/stocks/derivatives/etc. is this blood. But money is such an extraordinary feature/tool/invention that people working too much with it and too close to it become always crazy.

Radioactivity, morphine, also are very powerful things, but some rules must be respected.





Speak your mind

3 Comments so far

  1. Craig Bowles on September 26, 2008 7:30 am

    About 10 years ago, it was either the Dupont or Merrill economists who said watch out come 2008, because demographics roll over and more people begin to exit the workforce than are entering. The credit contraction is just a result of the problem. This is going to take time to work through and is going to suck. May as well not throw a bunch of money away at the start.

  2. steve leslie on September 26, 2008 11:52 am

    To my fine friend Laurence: People in general, do not want to be educated, for a variety of reasons. One of which is if they were then they would be responsible for their actions. This would eliminate the victim mentality. And needs for entitlements. They would be better of with a 12 step program.

    The Grandmaster is entirely onto something: There is always a solution to a problem, if the parties involved want a solution. One of the difficult things to endure in life is that there are many who actually revel in self-inflicted pain. Government is now involved because the private sector wants nothing to do with a broken system. There is no value in it if there were then capital would flock to it.

    The surfer and esteemed barrister has it correct: current models and paradigms currently are out of phase. We are in a Superman-like bizarro world where current laws of ecomonics do not apply.

    To Mr. Flam: your comments of course are pure satire yet if in theory an attempt were made to do as you suggest it would result in total worldwide financial anarchy and a chernobyl-like China syndrome a type of economic global thermo nuclear war.

    In the words of Joshua in War Games on war: "Strange game Professor Falken the only way to win is not to play." "How about a nice game of chess?" Well how about it GM?

  3. Mr T on September 26, 2008 12:20 pm

    Victor, should I read your comment as an endorsement of determinism?


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