I’ve posted Entry #75 to my weekly Investing: The New Rules column at the Death by 1,000 Papercuts site. It’s called Is Wall Street to Blame?
Juicy Excerpt: Say that these complex instruments are a very, very bad idea. Wouldn’t that just mean that the people who placed their confidence in the bad instruments would be busted but that someone else would come up winners? All the complexity in the world does not destroy wealth. And, unless large amounts of wealth have actually been destroyed, I don’t see why we haven’t been able to set things right again in the three years since the crisis hit.
It seems to me that we are suffering from a loss of wealth. Everybody is hurting. The poor are hurting. The middle-class are hurting. The rich are hurting. That’s the defining characteristic of this crisis. So I take that as an important clue.
I ask myself: What sort of phenomenon could cause huge losses of wealth to be experienced in every sector of the economy?