Jun

26

 I recently read Michael Burry's keynote speech to 2012 UCLA class. I think the last sentence of the following quote points out a sad reality about western countries and the political elites in particular. They do not intend to pay the bill today and face the issues. They need to postpone the moment of truth in order to preserve their position and priviligies and continue to milk the cow until there's something left for them. With very little transparency, statement after statement, and summits after summit, they explore solutions that would enable them to remain in power and win the next election. Exchanging long term term risk for short term benefit. Their benefit and the benefit of those who continue to make money thanks to their policy. Bad news hit the public and the situation gradually deteriorates month after month. As frogs put into a gradually heated pot filled with water, the public does not jump out. Until they realized they are boiled.

In any environment and situation there are opportunities to speculate and make money. This time is not different. Burry profited from the 2008 crisis. I have no idea yet how to profit from the next big wave that will hit us (it is not a black swan and it is only a matter of time). The point is that it is sad that our kids have to pay the bill for wrong choices they have not made. And that our societies are wasting the quality of life standards, the competences developed over the past decades because of greed and power of a few:

"Ben Bernanke continues to backfill this logic and I fear that history is being written wrong yet again that ignorance is willful. Our nation's economic policies are born of a synthesis of theories on how to deal with the great depression of the nineteen thirties yet seem unable to honestly examine the most recent one. Sadly at the highest levels of economic thought in government questions are not tolerated. It is as if we are dealing with the binary judgment of a fundamentalist religion. Finance theory and practice fare no better; the continuing crisis makes a mockery of the principles which have guided credit policy and risk management since the 1960s. As it turns out information is not perfect, volatility does not define risk, markets are not efficient, the individual is adaptable. But the dark ages of finance allow no such light. Mainstream economists and finance practitioners please check your premises. You have contradictions before you. Truthfully I do not expect much to change. Practically speaking, history has demonstrated the ability of sovereign nations to justify themselves and to postpone the moment of crisis."

Kim Zussman adds: 

Doctor used to be the zenithal career: near impossible barrier to entry, rigorous education, prestige and high income for improving people's lives.

Now it is the financial manager.

Maybe during his lifetime the meme will swing back and Michael will go back into practice.


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