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Author Topic: "BUSINESS CLASS: Imagination inflation"  (Read 958 times)
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Monkey All Star Jr.
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« on: March 27, 2010, 07:24:27 AM »

What if women ran Wall Street? Well, for starters, there'd be no bubbles. At least that's according "a new breed of researchers from the field of behavioural finance" who, says New York Magazine's Sheelah Kolhatkar, theorise that Wall Street is really just like your average angst-ridden adolescent Ė largely at the mercy of hormones.

"Itís the chemicals pulsing through tradersí veins that propel them to place insane bets and enable bank executives to make risky decisions... And because the vast majority of these traders and finance executives are men, the most important chemical in question is testosterone.

And what would happen if Michael Lewis ran Wall Street? If Michael Lewis was God [What? He isn't?], says Jennifer Schonberger in The Motley Fool, "everything that could be traded on Wall Street would be traded through clearing houses or on exchanges."

Or in Lewis' own words, "there would be no such thing as me at Goldman Sachs being able to call you at Morgan Stanley and make a $5 billion bet on subprime mortgage bonds that basically isnít on the books that investors canít evaluate Ė or that, if Morgan Stanley goes down, no one knows whether itís there or not... It creates all this uncertainty for the market. So all trading would be as out in the open as it could be.'"

What's more, God, er, Lewis "would 'insist' that the proprietary-like trading be done in a partnership structure, rather than in a public corporation," says Schonberger. "No partnership would ever be sitting on $50 billion of AAA-rated CDOs backed by subprime mortgages," says Lewis. "The attitude toward risk-taking in a partnership is just different. Itís not that partnerships canít do stupid things, but itís much less likely."

Seems like corporations get bailouts?  Have alumni in high places?  Federal Reserve? Treasury?

Why didn't Goldman and the others every open and make public their losses?

Why isn't America's biggest private bank, the one that controls our money, ever audited?

And the coup de grace; "To get from America's current situation to one in which hyperinflation is a realistic possibility, one must pass through an intervening step in which America's political institutions utterly collapse. And I submit that if Mr Kinsley has reason to believe that such a collapse is imminent, he should be writing columns warning about that rather than the economic messes which might follow."

The NYT's 'Economix' blogger Catherine Rampell also weighs in, arguing that inflating away Americaís debt is an unlikely option "not because itís too painful for politicians to implement, but because it wouldnít work. Too much of the countryís debt is indexed to inflation, either directly or indirectly (as with future Medicare liabilities). Even if government printing presses went gangbusters, Berkeleyís Alan Auerbach calculates, 90 per cent of the countryís debt problem would survive."

And just in case that's not enough to reassure you that America's gigantic pile of debt is going nowhere, here's Felix Salmon on why he, too, is unfazed about hyperinflation. And if your thirst for inflation nous is still not sated, Krugman has set some required reading. Hop to it.

Hyperinflation?  What value would hyperinflation be to Obama and his crony's? 

Let me think...it would destroy Americas working middle class, past, present, and future.

Spending, debt, taxation, hyper-inflation...

Make those who planned and saved for retirement live in Obama's poverty?  If he can't tax away their little savings, he'll destroy it through hyperinflation?

The leftist message seems to be - 'only the rich have 401Ks'...

Why isn't the message 'only the rich have union pensions and Cadillac health plans'?

more good reading here - http://www.businessspectator.com.au/bs.nsf/Article/BUSINESS-CLASS-pd20100325-3V848?OpenDocument&src=sph

Maybe it's time to audit and abolish the Federal Reserve?  Find out who the almuni selected winners and losers might be?

All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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