Friday, October 10, 2008

The Fleece Market

The free market as we know it is no more!

One of the central pillars of economic theory is the expectation that people and economic entities will always take reasonable decisions and make sound choices.
Oh boy, how wrong we have been all along!! It would have been better to have assumed that, as a matter of fact, all humans are incorrigible morrons and on that premises we could have put together the necessary safeguards in our economic theories to minimize the risks.
The unfolding economic quadmire the whole world is wallowing in, makes a mockery of the much-heralded assumption of reasonableness. We are all witnessing the consequences of the untested and laissez-faire decisions that have been made over the years by greedy and callous men and women in charge of many branded financial institutions.
Let me express a very critical fact that many seem to forget so easily:
designing very complex financial derivatives and other instruments and simply passing them through the system for implementation by people who have no idea of what they are dealing with coupled with the total disregard for checks and balances will always sink the ship!

Greed, deregulation and irresponsibilty are essentially the hallmarks of the present contagion.
As it was with Nick Leeson so it has been with these clueless managers of our financial resources. Only this time the scale has been massive, brutal and catastrophic!
Global brands are collapsing like dominoes before our eyes every day. The Securities Markets have lost trillions of dollars in a matter of weeks. This is unprecedented! It will take years for the markets to get back to where they were. I wonder if any lessons would have been learnt by the time it is all over.

4 comments:

The Author said...

This all sounds brilliant (just like the analysts talk about it on the big international tv channels) but I just get the general drift of it i.e. too much freedom to experiment with too many financial tricks has done us all in.

Welcome back. I thought you'd abandoned this enterprise.

posekyere said...

Nana Yaw!
Thanks for passing through.
Got hijacked by a project. I am hoping that the latent stamina for blogging will somehow crop up.
You have flawlessly diagnosed the disease.

novisi said...

to be frank i'm enjoying all these financial downhill like crazy!

i have for long wondered why we are not being sincere with ourselves!

so much thievery is going on under the guise of banking, mining, trade, etc!

worst of is all the confusion about industrialization and the ripple ills it leaves the earth for generations!

i believe human beings need opportunities like these to re-think and reassure ourselves that nothing we do that is not human-centred is sustainable!

we must get back to the basics of knowing that whatever is done by one person affects another in one way or two or more! these are hardly immediate tangibles and we don't even bother to IMAGINE let alone take preventive first before curative measures!

it's all about the foundations!

posekyere said...

Hi Nov,
You are so right, my man.
Perhaps we all need to go back and read the doctrine of "enoughism" really well to see if there are things we as inhabitants of this precious planet can adopt as standards for all nations.
In my post on enoughism, I rejected it as a ploy to keep Africa and other developing Nations back, but looking at it critically today, I guess the enoughists have a point or two!
The extent of global greed, thievery and utter recklessness is astonishing, to say the least