Failure of Simplicity?
Today, BBC News linked to a Nov 2007 explanation of the sub-prime fallout.
Apart from being prescient, it's one of the best 'why it happened' explanations I've seen, using a very simple method of a checkbox to overlay an explanation.
Maybe this is too simplistic a thought, but putting aside capitalistic greed, corporate incompetence, short-termism and impotent regulators, isn't the fundamental problem here one of a failure to maintain simplicity in the lending market?
I mean, lending against deposits worked for hundreds(?) of years, along comes a obfuscating abstraction of the lending process (abetted by all the factors listed above) and bam.
I'm in no position to invest anything, but when I am, I'll never forget to look for long-term, simple investments.
Maybe that's another factor why gold and commodities are so high - it's comforting to fall back on simple constructs in these confusing times?
