The recent Business Week had several articles that we ought to look at. A couple of these will require further attention.
- -- Financial Innovation Under Fire covers three views about the needed regulation. Namely, the best-and-brightest need a leash to reign them in prior to bad consequences. The article characterizes as "beneficial ideas" and those that "are self-serving or dangerous" the types. Who knew beforehand? Or were we just to marvel at the creativity? One piece of news is that MIT has a Laboratory for Financial Engineering. Despite that opinions about financial engineering have already been offered, the blogger is willing to entertain the increasing role of computation. We do need what the virtual world offers and will look at this more thoroughly on a regular basis. After all, he spent his working life in advanced computing. Hence, he knows our main task, to prevent the wizards from their self-serving ways.
- -- In the future after the mess, what will be the consumer footprint? After all, we cannot expect people to live under a regime of increasing debt with no limits in size or extent, meaning, of course, that related to the rights of the progeny. Okay, some, like Fisher, see debt as an asset which it is. For instance, being able to borrow, that is, having a good credit rating, is important. That's not the same as debt on the balance sheet. The issue is that the consumer part of the economic equation is large. Some say 70% since $10 trillion of the $14 trillion of the US GDP is "personal consumption expenditures" according to Bus Week's Michael Mandel (Reconsidering Consumers' Impact On The U.S. Economy - Sep 28, 2009). However, splitting the number so as to isolate "out-of-pocket" spending, then the impact falls to 40%. Still large.
- -- There was an ad for Fisher's book, Smelling a Rat. He also has a website.This sounds like something that Whose Nose Knows will need to look at.
10/05/2009 -- Ah, yes, on the behalf of.