Again, I am not sure how accurate this is, but I do know that the truth in the world of finance is elusive, and, yes "baffling."
"In many ways, money making is more an art as a science," I wrote two years ago in my book, PLUNDER: Investigating Our Economic Calamity, reporting on the meltdown in 2007. It was published a week before Lehman collapsed.
Despite all the rules that govern the markets or regulations designed to assure transparency and accountability, crooks, swindlers, and even gangsters are commonplace.
Clearly some of our "market makers" know what they are doing. There is also extensive posturing in the industry to mask the often-fuzzy line between risk and uncertainty.
In many instances, major decisions are made on the basis of fragmentary knowledge, even ignorance, despite professions of careful reviews and "due diligence." Even "sophisticated investors, can be bamboozled, as we saw in the unmaking of Goldman Sachs and Bernie Madoff.
The Financial Times cites a supposedly knowledgeable market economist at Lehman who said: "We are in a minefield. No one knows where the mines are planted and we are just trying to stumble through it."
Another market participant put it this way: "It is not the corpses at the surface that are scary, it is the unknown corpses below the surface that may pop up unexpectedly." This sounds like a horror movie.
I was talking about this after the last collapse:
"Many of the "experts' whom I read or see on TV seem clueless, full of hot air. Many of their predictions turn out wrong even when they seem so self-assured and well-informed in making them. Jim Hightower warns against believing them, writing: "Don't be deterred by the finance industry's jargon (which is intended to numb your brain and keep regular folks from even trying to figure out what's going on).'"
How does one make sense of what is going on? You have to burrow in the business pages and read articles from the bottom up because the most revealing facts are often buried.
You have to break dependence on mainstream media and check out specialized Web sites, blogs, and alternative sources.
After the New York stock market took a 340-point drop in 2007, only to quickly recover, I went to the business pages of the New York Times. I figured that they would explain it.
But they didn't know the reason for it either, reporting "emotion and psychology, not financial fundamentals were mostly at work." They quoted the chief U.S. equity strategist for Citibank: "I don't think anybody can make sense of it."
Part of the problem here is that the traders and brokers have come up with all sorts of highly esoteric and complex financial instruments - ways of securitizing debt and raising capital - that outsiders, even experienced financial journalists, have a hard time understanding, much less explaining.
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