Re: Is This So?
On Jul 3, 2006, at 10:49 AM, Dennis Perrin wrote:
From Cockburn’s C-Punch column:
“Could America desire any more potent evocation of virtuous
capitalism at work? Surely not. And is this not a good time to
evoke such virtues? It surely is, because it’s clear, as we head
into the summer of 2006, that the world capitalist system is out of
control. Literally so. In the older order of things, international
bodies such as the International Monetary Fund, the central banks
and kindred bodies could claim to have some purchase on the overall
situation. Not anymore. The major players these days are thousands
of managers of private equity funds-traders in shares, bonds,
derivatives and other instruments of a complexity that would
require the genius of the late Stanislaw Lem to evoke, as he did
the planet of Solaris.”
Minor point: private equity funds mostly exist to buy up whole firms;
he seems to be confusing them with hedge funds, which do trade all
those things.
He’s got half a point, but not a full one. Just because Cockburn
doesn’t understand an inverse floater, that doesn’t mean that no one
does. Monetary policy is still pretty effective and the broad
outlines of the system have hardly changed beyond recognition. What
is it with this impulse to declare that everything has changed
utterly? Derivatives have been around for centuries, and although
they’re more complicated than they were in 17th century Amsterdam,
the principles are still the same.
Doug