c b wrote: > The puzzle as to AIG gambling is that it is one of the ruling monopoly > finance corporations.
why "monopoly"? it seems that competition was crucial to creating the crisis, as each financial organization tried to offer higher and higher returns to attract customers, usually involving more and more leverage or other risk-taking. > It doesn't seem probable that it would gain that > level of concentration of wealth by undertaking ventures in which the > odds of winning were not heavily in its favor. It would mostly likely > have become a "king" of the capitalist "hill" by taking many _low_ > risk _ to itself_ actions. This is almost true by the definition of > the word "probable". One probably gets rich by taking actions one is > probably going to win, not by taking actions that one is probably > going to lose. They make sure bets, not true bets. were they really taking risks? didn't they believe that the government was going to bail them out in the end? even without expecting bailouts, a lot of financiers were expecting (1) that the market would continue to go up but (2) if it didn't they'd be able to get out on time but (3) if they didn't get out on time they could still grant themselves bonuses or golden parachutes. Not much risk there. > I realize that the myth is that capitalism's captains are risk takers > and that higher interest payment is rationalized by higher risk > taking. But I think this is exactly that - a myth. Those most > successful in business and finance are those who figure out how to > decrease the risk of loss to themselves the most. Again this almost > follows deductively from the definition of "risk". coal-miners take many more risks than capitalists ever did. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
