Last Night 60 Minutes aired an enlightening 12 min. spot on the Shadow Financial System — in which James Grant blames Wall Street investment houses, in the main, for the mess that not only bought the investment banks to the brink of ruin, but also all but wrecked (so far!) the worlds financial systems. It reminds me of an old line from Sci Fi author Robert Heinlein, paraphrasing, "People don't learn from the mistakes of others. They seldom learn from their own mistakes. Never underestimate the power of human stupidity."
As for mistakes, I agree with some of the 60 minutes interviewees that what happened at the top of the investment banks, and among some of their top traders, was likely more the stuff of outright graft and corruption than the stuff of mistakes. The big mistakes were made by the Fed, by the SEC, the so-called rating agencies, and others — in Congress and several Administrations who failed to see not only the bubbles they were blowing (Nasdaq, the housing bubble, and others around the world), but failed to regulate — were indeed actively deregulating — the financial markets. And not all the government players should be left out of the graft and corruption charges. Blame too a distracted American public more interested in watching "Reality" TV, sports and other amusements, than in watching what was happening to their government, to thier retirement funds, and so on.
Watch it:
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