I have an even better idea:
When one of these funds go under because of really crappy and possibly unethical "bets", we should lock those traders and their bosses in a room with the customers they just ruined.
No SEC, no Fed intervention, no police, it would only have to happen once or twice.
Dark justice is the only true justice sometimes.
When one of these funds go under because of really crappy and possibly unethical "bets", we should lock those traders and their bosses in a room with the customers they just ruined.
No SEC, no Fed intervention, no police, it would only have to happen once or twice.
Dark justice is the only true justice sometimes.
DislikedIt's really hard to say what's best overall. The Darwinian in me says that institutions that manage money improperly SHOULD go under. This has been happening with hedge funds lately what with margin calls etc. The way I see it, banks are essentially trading on margin as well - their customers' funds. The Great Depression was essentially one big customer-driven margin call, with depositors withdrawing their funds (the banks' margin), thus forcing the banks to liquidate their investments, thus depressing market prices, etc. Let those who have bad risk-management go under, and the economy should be better off in the future. Surely I'm no Economic Ph.D., but that's just how it seems to me.
On the other hand, extinction and depression are common in natural population cycles. In some of my engineering courses, we used differential equations to simulate these predictable cycles. These systems can have different degrees of what engineers call damping - the reduction of natural fluctuations. Essentially, the purpose of the Fed is to apply damping to our economic system in order to decrease fluctuations. We are thus relying on the Fed to apply this power appropriately. Hopefully they got As in their diffeq classes... otherwise, America might be steaming full-on into stagflation.Ignored