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The most important source of economic advance comes not from doing the same things better, but from achieving the same objective in a completely different way.
Obtaining better information about companies is essential to the efficiency of markets and society: obtaining it fractionally earlier is of no public value at all.
If I had a million pounds for every time I have heard a possible reform opposed because “it wouldn’t have prevented Northern Rock or Lehman Brothers going bust”, I might now have enough money to bail out a bank.
If we engineered the financial system with the same care and competence as the electricity network, financial crises would be less common.
President Nicolas Sarkozy was reported to have told aides “if France loses its triple A rating, I’m dead”. A few days later France lost that status; a few months later, Mr Sarkozy was out of office.
Modern life involves complex and multidimensional products. It is perhaps inevitable that price structures appear similarly complex and multidimensional.
In the modern financial economy, the main effect of QE is to boost asset prices, as market gyrations of recent weeks have clearly illustrated. But is the pursuit of higher asset prices an effective or desirable means of promoting economic growth?
Why do we devote more resources to training carrier pigeons and building fibreoptic links than to understanding military and business strategy?
One of the paradoxes of modern business is that firms have never had so little need of capital or so much involvement with capital markets.