High Concentrations of Money and Power and Moral Hazards

"High concentrations of money and power provide trigger points for economic calamity that can be brought about by relatively few individuals or institutions. The potential harm which can arise from acts of malfeasance represents a moral hazard in our investment environment. Some financial theorists would argue that this risk is “priced in” to our investments so that what we invest in is fairly valued with respect to its risks. I see little sound rationale to accept this point of view. Risks that can be perceived and quantified can perhaps be priced in to arrive at an estimate of fair value for an investment. Many risks, such as the moral hazard of malfeasance, cannot be effectively quantified. The media, institutional, and governmental approach to representing these types of risks to the general investor seems to be to marginalize these risks. This approach gives a false sense of security and the impression that these risks are non-significant. This may be necessary to manage the perceptions of the general investor and retain confidence in the financial markets. From the perspective of the individual, this approach breeds complacency where there should be vigilance in the wise management of one’s assets."

The Emperor's Clothes: Megatrends Affecting Your Financial and Investment Decisions

♭: Out of Key

The Kings are coming...with lies, lies mixed with Bull Manure. Honor will be forgotten.

"Cramer is pounding the table at CNBC for another 0.5% immediate rate cut."
No inflation there... time to lower FED fund rates another 50bps.