Joulie

Scarlett O'Hara, Doris Day and Financial Market Tumult

Thanks for the article, I thought it was great.

I haven't read the Grant piece, but the gist seems to be: All the backstops in regulatory, corporate governance and simple individual ethics failed, what happened?

Deconstructing what happened, not surprisingly, the theme running through it all like a red thread is, "Maximize my pay regardless of my performance". Put another way, "Money attracts flies."

So where are we: disorientedly afloat. Asset (stock, commodity) market values are untethered from the price of the financial instruments that created them.

The article points to the gold standard. Is gold the answer? It does tie valuation to something. I think it's too early. We don't know what we don't know, we need more unwinding. I don't even think mark to market by selling 10% and seeing what you get will work -- it's a moving target.

My vote: We need damage control during this "Great Unwinding".

Regulate leverage up the wazoo where ever you find it. Naked shorts, commodity futures, whatever. I'm not sure what needs to be done, but, painful as it may be, we need to have supply and demand relate to the asset, not to the financial instrument alone.

So far, the regulators seem to be saying, to paraphrase Scarlet, "[public] opinion is a matter of supreme indifference to me."

I'd like to see the D&O insurers help as far as governance, maybe they can team up with the regulators and make and actual plan, unlike what we have now, which is chaos.