"Like Robert Oppenheimer and his team of nuclear physicists in the 1940s, Brickell and his JPMorgan colleagues didn't realize they were creating a monster."
Maybe it does, but then you would be pissing off the 'free market'.
- AIG should do whatever it wants with its papers! Why do you hate my freedom?
Kidding aside, it's easy to think back and see what went wrong. But the truth is that a LOT of daily financial transactions, small to large, have several layers of buyers, sellers, lenders and buyers.
For example, in your example, why did Ford needed $1B? To sell cars to people and companies. And where do all these people and companies get money to buy cars? They borrow.
So what's the last layer? How many are allowed? What's its depth? All this stuff is interconected. Maybe it's one degree from a financial institution... what's a financial institution? Hedge, pension, banks? A company doing 49% hedge and 51% consumer savings is what?
And believe me, not matter how many locks we put, the finance people will find holes. They will do it because that's where new money is. It's their jobs to find it.
The issue then becomes how to identify, mitigate the damage, and close these holes. Which has its theories 100% in economics and its practices 100% in politics. Awesome.
Comparing a JPM MD to oppy? huh?
This is why I don't read newsweek. argh!