Wednesday 29 August 2007

Resilience

A very reasonable preoccupation around this and other commentaries is whether the global financial system is robust enough to absorb the forthcoming ‘correction’ without catastrophe. I particularly enjoy Bearwatch (Sackerson) and Angels in Marble (Hatfield Girl) [and a commendation is due for Discursive Monologue too - CU]

The seriousness of the present situation, and the potential for screw-ups by governments and financial authorities, are not in doubt. Ditto the scope for individual financial disasters.

But the overall resilience of the system may be greater than some fear. There is a huge amount of private-sector brainpower able to switch into restructuring mode with lightning rapidity – far quicker than any regulator or finance minister can react – as was demonstrated by the Far East crisis of the late 1990’s, for example. The profit motive has a way of sorting these things out: and the speed of modern communications ensures that price signals are transmitted widely and quickly. Almost any big shift represents an arbitrage opportunity for someone.

The disposition of wealth before and after a big shock is different, for sure. And, as airily as we may dismiss the Asian financial crisis a decade on, it needs to be recalled soberly that some Indonesian tribes reverted to cannibalism, so extreme was the resulting poverty for a while.

We may not need to wait long to find out whether I am right. In the meantime, on a personal level, as Sackerson has recently commented, diversification is the key.

My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate

Upon the fortune of this present year
(Merchant of Venice)

(Or invest in guns ’n gold, of course, if the Hitch is your preferred sage ...)

ND

9 comments:

Anonymous said...

No matter what happens in the capital markets, something permanently bad will happen to the U.S. economy--bad politics.

Financial crises give those sneaky politicians in Washington an excuse for intervention and increased central planning (control).

I just hope that Jim Rogers is wrong when he says that the politicians will blame those wily foreigners. We already have too much anti-foreigner/protectionist sentiment all over the country, especially in Washington.

I'll start taking Madarin classes if another Smoot-Hawley comes about.

Nick Drew said...

Matt - not for us to comment on your politicians ...

I read your Wells Fargo piece with interest. Having something of, ahem, a ... perspective on Enron, I can imagine what they've been up to.

Mermaid of Moorgate said...

guns n gold... or just gold... still a good investment fella, just look at funds like the Blackrock Gold & General or JPMorgan's Natural Resources fund. Stonking! What the fuck am I gakking about? I can't get investment out of my head. I actually came here to ask how the baby was faring and whether you were getting enough sleep?

Anonymous said...

Nothing quite like guns for protecting your wealth - I guess that's why the Duke of Westminster is head of the territorial army!

I don't expect we will be eating each other in the street. We have learnt a lot from the Great Depression. In the end the real economy is still a powerhouse of food production, goods and services and a new government with a fresh start will start to re-couple real demand with real supply.

The only big problem is that getting a failed economy moving again usually means bailing out those that were responsibe for its failure. This is the "moral hazard" that Alan Greenspan likes to warn about, where the prudent are forced to bail out the reckless and learn a painful and unpleasant lesson as a result.

A bigger problem for the UK might then be that the middle-classes decide they have had enough of the UK and just get up and leave at the earliest opportunity.

Nick Drew said...

Anon - couldn't agree more on the moral hazard: we've blogged on this 'one-way bet' before.

http://cityunslicker.blogspot.com/2007/08/here-we-go-again-one-way-bet.html

The theory of Capital Adequacy is sound, and if the financial regulators were halfway up to the task, the reckless could be made to take far more responsibility for their actions.

The excesses of the unions in the '70s and '80s that CU has written about, required draconian actions to rein them in. I see a need for some adroit measures to restore discipline to capital as well. Nothing new - just enforce current regulations rigorously.

Nick Drew said...

Mermaid, you are back again ! CU will update you on the little Slicker, no doubt: but what are you doing swimming over here with your splendid tips ? We don't do poetry competitions: all a bit dry for you, I should say.

CityUnslicker said...

Little slicker is fine. That Blarock investment vehicle is well down since the 'correction'!

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,