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Politics : American Presidential Politics and foreign affairs

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To: Peter Dierks who wrote (38525)	11/13/2009 1:23:22 PM
From: DuckTapeSunroof	Read Replies (2) of 71588

(You are responding to a post made back on March 16? Damn.... :-) All I can think of to comment about that last post is that all the sub-prime mortgages in the entire world wouldn't (at their peak) even have added up to 1/4 the notional size of the entirely unregulated, non-collateralized Credit Default Swap markets (some $60 Trillion or so, best guess....) Minsky Moments COME on a fairly regular (if infrequent) basis in Capitalist systems. Always have. The main key it seems to preventing as many as is possible to prevent, and to mitigate the worst excess of any financial collapse... is to NEVER let leverage to grow to excessive heights, and to put as much "sunshine" (public knowledge, open and transparent price discovery) into the systems that we build. Because Adam Smith's "Invisible Hand" CANNOT FUNCTION as the highest/best allocator of resources WITHOUT market participants having as close to "perfect knowledge" as is possible. Absent that (keep price discovery secret, allow 'dark pools' to proliferate) and the allocation efficiency of the "Invisible Hand" quickly degrades and mere Crony Capitalism results....

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