On Jul 3, 2006, at 10:49 AM, Dennis Perrin wrote:
> From Cockburn's C-Punch column:
>
> "Could America desire any more potent evocation of virtuous
> capitalism at work? Surely not. And is this not a good time to
> evoke such virtues? It surely is, because it's clear, as we head
> into the summer of 2006, that the world capitalist system is out of
> control. Literally so. In the older order of things, international
> bodies such as the International Monetary Fund, the central banks
> and kindred bodies could claim to have some purchase on the overall
> situation. Not anymore. The major players these days are thousands
> of managers of private equity funds-traders in shares, bonds,
> derivatives and other instruments of a complexity that would
> require the genius of the late Stanislaw Lem to evoke, as he did
> the planet of Solaris."
>
> <http://www.counterpunch.org/cockburn07032006.html>
Minor point: private equity funds mostly exist to buy up whole firms; he seems to be confusing them with hedge funds, which do trade all those things.
He's got half a point, but not a full one. Just because Cockburn doesn't understand an inverse floater, that doesn't mean that no one does. Monetary policy is still pretty effective and the broad outlines of the system have hardly changed beyond recognition. What is it with this impulse to declare that everything has changed utterly? Derivatives have been around for centuries, and although they're more complicated than they were in 17th century Amsterdam, the principles are still the same.
Doug