Actually, I agree some of the views of the author and some not.

Thanks
Raushan

Yes indeed! My beef with the current situation is not so much that we’ve had the usual suspects on steroids: Greed, Bad Govt, Bad Advice, etc… What is frustrating me is that there will be very little accountability for all that. Although investors will say they’ll be more cautious and pundits will say they are humbled that won’t last long and we could be off to the races again.

Think of the “generate a mortgage, package it and sell it” industry that replaced the older style “a mortgage is an asset to be held locally” paradigm. Giving mortgages to a sporadically employed lawncare worker never made sense if one took a long term view, but once the industry shifted to collateralizing such mortgages by packaging them and shipping them off to less-alert buyers, the granting of a mortgage became a profitable game.

Hedge Funds: Give us lots of money and we will do something with it but won’t really tell you what it is and perhaps all we will do is invest in other hedge funds … well, something like that would never fly a generation ago.

Leveraged Buy Outs: We buy the company then we sell off some of its various parts and use that money to pay off our loan? Thats like buying a car and then trying to pay for it by selling the wheels and the engine.

Rules change. And constant vigilance is required just for that reason.

Mattress stuffers will never lose… but they will never win either!

The “meltdown” seems to have had some aspects reminiscent of the famed Tulip Mania wherein tulip trading made fortunes but the tulip bubble eventually burst, as most bubbles do! Comparisons between the annual income of a skilled tradesman and a tulip broker are probably somewhat similar to the comparisons of today between a “bricks and mortar” business and some over-hyped Social Network Search Optimized Marketing start-up.

Madoff Mania? Well, he was saying give me your money and I won’t tell you what I’m going to do with it, I’ll just return a profit of ten percent on it. Well, take away the reputation and social connections and you’ve got an obvious con man! It wouldn’t fly in Peoria… so how did all those Palm Beach types get fooled? Adding six zeroes to the dollar amount involved doesn’t change the nature of the con.
Some ultra hip party in Palm Beach is no different than a street corner in the ghetto: In God We Trust, All Others We Audit.