Saturday, June 6, 2009

Real Markets 101: Some serious views

For those of us who are not professionally involved in today's financial and investment infrastructures they represent opaque and sometimes threatening circumstances. A little light reading can alleviate this feeling although I cannot promise mastery of the subject. Here are a few selections, by way of internet links, that I have found helpful. First, an important quote attributed to Keynes.

"The market can stay irrational longer than you can stay solvent."

John Maynard Keynes

Deregulation, Free Markets and Econ 101

Notice that the following article was written in 2006, well before the financial meltdown.


Another major player:

Phil Gramm

When I was still a graduate student (long ago), I had an intelligent and seriously religious room mate who observed that "religion is an act of conscious blindness." I never knew how close politics is to religion until I found the following op-ed. Notice the date.

Phil Gramm Is Right

In all fairness, here is a conservative view from the Heritage Foundation.

Meltdowns and Myths

And here is an expert's video view of the facts, which I repeat.


To round out this introduction, I have included a current NY Times financial article.

Poking Holes in a Theory on Markets

My own view at this time is that the markets are not fully informed nor fair nor adequately regulated and that various advisory services manipulate their clients with mixtures of greed, fear, and inflated claims. The amateur is indeed a minnow among sharks. Caveat emptor! However it is possible to find Internet sites which present a variety of voices.

Although the markets bear little resemblance to the idealized markets, the ones with those wonderful invisible hands, they do resemble the ideal in at least one way: virtually everyone is trying, first and foremost, to feather his own nest. Under these conditions, like Yossarian in Catch 22, you would be a fool not to do the same. This requires of the non-professional an extreme defensive posture. I am reminded of the early cold war nuclear defensive posture: put your head between your legs and kiss your ass goodbye.

Draw your own conclusions.

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