Faithbased Capitalists
by digby
I don't have money so it doesn't really matter to me except in the big macro-economic sense that it worries any citizen. But if I had some serious money in the markets, I'd be worried about this too:
I think the reaction to the Lehman scandal (not particularly strong generally) is very telling. The investor class should, much more than me, care that a major company was engaged in accounting fraud and should worry, much more than me, that other companies are doing the same. That they aren't says a lot about how the game really works.
I realize that "market psychology" is important and that much of the market's success or failure is based on tinkerbell logic, but this is ridiculous. At some point the numbers do matter. When these people commit fraud the whole thing falls apart no matter how loudly you clap. I would think that the people with real money would want the market to be honest, but I guess they all think they are smarter than everyone else and won't be among the losers. Faith-based.
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