Twofish's Blog

September 19, 2009

Business As Usual – One hopes

Filed under: finance, wall street — twofish @ 10:02 am

http://delong.typepad.com/sdj/2009/09/in-which-we-nominate-kenneth-almquist-to-the-order-of-heroes-of-intellectual-labor-third-class.html

One more thing about incentives. There has been no massive public outcry for really deep, radical changes in Wall Street. There will be changes, but they won’t be huge ones. The reason for this is simple. The Dow is at 9700, and unemployment seems to be stabilizing.

If the Dow were at 6000 and unemployment at 15%, there would be huge, angry, lynch mobs looking for bankers to string up, and there would be the political will and incentive for vast, deep, and radical changes in Wall Street.

As it is, things seem to be getting back to normal, and people aren’t quite as angry as they were a few months ago. With people not angry, people just don’t care that much about radical changes to the financial system, and that means “business as usual” when it comes to hammering out the details.

If we get back to Dow at 12000 and unemployment at 6%, then all will be forgiven. If we have a double dip, and things start going into free fall again, the public will be back to “shoot the bankers” and they’ll probably be even angrier than they are now.

Now what I’m thinking about is what are the minimum set of changes that we absolutely have to make to the financial system to make sure that I don’t have to go through this hell again.

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1 Comment »

  1. a minimum number? something doesn’t quite sound right to me about “a minimum number” – - that sounds almost lazy to me.. if we think about things like that as a nation…

    let’s think about what the system SHOULD be like… and then think about the minimum number of changes we need to make to get there…

    it sounds like you are saying… the system is fine… as long as we don’t have angry lynch mobs trying to lynch bankers…

    why would someone want to lynch a banker as you say? is it the bankers fault, the customers fault, or the systems fault?

    what would the system have to be like so that everyone wants to hug bankers? (and conversely bankers want to hug customers, and the system) what is the minimum amount of changes we need to make to get there..

    i am attempting to be a bit tongue and cheek here.. but i also attempting to be a bit serious.

    Comment by eme — October 25, 2009 @ 5:03 pm


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