The Last ‘Mystery’ of the Financial Crisis


“As you know, I had difficulties explaining ‘HOW’ we got to those numbers since there is no science behind it,” confesses a high-ranking S&P analyst. “If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value,” complains another senior S&P man. “Let’s hope we are all wealthy and retired by the time this house of card[s] falters,” ruminates one more.

Rolling Stone Mobile – Politics – Politics: The Last Mystery of the Financial Crisis.

More Skin in the Game in 2013:: Nassim Taleb [Project Syndicate]


Without sound foundations the global financial sector are little more than licensed “cowboy builders”!

The ancients understood that the builder always knows more about the risks than the client, and can hide sources of fragility and improve his profitability by cutting corners. The foundation is the best place to hide risk. The builder can also fool the inspector; the person hiding risk has a large informational advantage over the one who has to find it.

More Skin in the Game in 2013 by Nassim Nicholas Taleb – Project Syndicate

The Other Financial Crisis – Project Syndicate


The author is far better qualified than I to comment on the matter but I do believe I have a worthwhile, if not ‘contribution’ then, comment or question. Money is no more than a promise based upon the assumption of future economic growth. Is the enabler of innovations (driven by new thinking, collaboration and technology) required to fuel that growth but is constantly being devalued as a result of the current economic climate, so is in short supply: how do we expect to achieve the required growth? Doesn’t that make ideas and innovation a more bankable currency than conventional money? My conclusion: This IS an ‘Innovation Economy’ where ideas are worth more than money but will be left to whither on the vine without it!

Proper access to credit for productive segments is an integral part of a well-functioning economy. Without it, growth falters, job creation is insufficient, and widening income and wealth inequality undermines the social fabric. That is why any comprehensive approach to restoring the advanced countries’ economic and financial vibrancy must target the proper revival of private credit flows.

http://www.project-syndicate.org/commentary/advanced-countries–private-credit-crunch-by-mohamed-a–el-erian

Micro, Macro, Meso, and Meta Economics – Project Syndicate


If classical economics is known to be ‘incomplete’, so deeply flawed or theoretical to be useful in the real world WHY do they still try to tell us…anything? WHY do we still place so much store in what Economists tell us?

The British economist Fritz Schumacher understood that human institutions, as complex structures with dynamic governance, require systemic analysis. He defined meta-economics as the humanizing of economics by accounting for the imperative of a sustainable environment; thus, he included elements of moral philosophy, psychology, anthropology, and sociology that transcend the boundaries of profit maximization and individual rationality.

http://www.project-syndicate.org/commentary/new-thinking-in-economics-by-andrew-sheng-and-geng-xiao

Ontonix have, recently, developed a tool to deal with Large Ecosystems: MetaNet™

Dilbert does Credit Agencies & Capitalism


image