Barack Obama promised on Monday not to rest as long as this economic downturn persisted. He promised to act decisively, change whatever had to be changed, spend whatever had to be spent. This is precisely what worries the investors to whom I spoke. They’d rather see the audacity of doing nothing.He blogs at Harvard Law School, so he meets the official definition of "wicked smaht." RTWT.
Monday, February 16, 2009
Want to understand the economic mess?
Then read Philip Greenspun's blog. I just stumbled across it, and it's filled with good stuff, like this:
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3 comments:
Wrong! The first sentence of Greenspun's blog entry explains why this is so wrong.
"I spent a few days recently in the company of some money managers with a total of about $2 trillion to invest, precisely the sort of folks whose confidence the government is currently trying to win."
No way. What Greenspun did was spend a few days with the people; some of whom may have caused the current global financial disaster. People who THINK they have 2 trillion to invest and have FORGOTTEN that they were entrusted with investing other peoples money.
Hey Brian, you found me! ;-)
There's no doubt that investment has dropped way off. However, the incentive structure for everyone involved is very telling:
- Even incompetent financial managers need to show a profit, or they won't be financial managers any more.
- Politicians need to bring home bacon (public spending) to favored supporters.
My guess is that group #2 will cause a lot more damage than group #1, because the incentive structure lets them be successful even if the economy goes down the tubes.
You seem to think that the lack of competence somehow relates to people not staying in a job. I'm here to tell you that ain't so! Incompetent financial managers that fail to show a profit are know as veteran financial managers.
When it comes to investing today people are afraid to vote with their feet (or funds) and take money out of a loser investment or fund. The funds make it hard. The financial media (mostly folks that can't read news) tells them its a bad thing to do.
And then there is the whole "Madoff" style plan. He COULDN'T be a THIEF or a FRAUD! Oh no. That was Bernie Madoff. He funded art and charities. He was above all that. Well, he had the SEC fooled for sure.
Greenspun to date is just more of the same.
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