On Sun, Mar 29, 2009 at 1:05 PM, Jim Devine <[email protected]> wrote: >> 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.
Here, we have to separate the agent (traders, mortgage brokers, hedge fund/private equity managers) from their principals (the investment banks, hedge fund investors). I understand that most of the IBs went from being partnerships to public corporations in the last 25 years. It coincides with the time that leveraging and risk-taking increased astronomically. So this is a relatively recent phenomenon. Note also that Goldman Sachs - the last of the IBs to go public - was also the one which protected itself most vigorously. It is not AIG or Lehman who are the monopoly capitalists. It is the ruling elite that controls these institutions. -raghu. -- Seeing is deceiving. It's eating that's believing. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
