jaycey

Charlie Munger's Lollapalooza Effect and This Credit Fiasco

The cycle of financial scandal:

After the horse is stolen, lock the barn door.

A few years later, after everybody's forgotten the theft, remove the lock.

Repeat.

All the recent scandals (S&L, Enron, Subprime) involve repealing or circumventing regulations designed to prevent them--usually politicians responding to special interest cash but sometimes financial innovation provides a way around existing regulations. These things don't have to happen, they are all variations on themes that go back into the mists of history.

The ratings agencies conflict of interest deserves more attention in the media. Maybe litigation can accomplish what public opinion can't?