我是默默生。I AM MURMUR SAN.

I used to believe the comments from the media that the 2008 economic crisis was caused by a tiny group of greedy Wal-Street bankers.  Making me the most angry, they still got incredibly high bonus while every tax payer covered the troubles they made.  They took the beef and noodles and spreaded the hot soup out to everyone else.  

However, if there had been nobody interested in the "magically" profitable products with such high return yet low risk, how could the snow ball have become bigger and bigger and finally crashed?  If the people had turned deaf ears to those alluring words from the professional agents, how could they have suffered so huge loss and countless people have been squeezed to the edge?

While the public looked for the ones who ought to be sent to the guillotine, those making accusation should be blamed as well.

On the other hand, it was nearly a fairy tale to expect the people remained clear minds when the bubble growing from 2002 to 2007.  Ironically, most of them were financial expertises but they joined the game before they figured out the danger they risked.  The people saw those who bought the "reliable" securitized assets got fruitful return, and it seemed that only the fool who  couldn't understand the game rules would stay outside.  They must be proud of their competence to know how to operate this "money machine".  Unfortunately, the story ended with a cliche -- those who play with fire got burned.

After reading this book, I realized why the officers “would" save Bear Stearns, why they "couldn't" rescue Lehmen Brothers, why they "must" hold AIG, and why they "had to" aid Morgan Stanley and Goldman Sachs.  For Bear Stearns, it was kind of an emergent operation before more serious symptoms were diagnosed.  For Lehman Brothers, the authorities acted passively because they were simply afraid of the ethnical accusation.  For AIG, the fail of this insurance giant would lead to catastrophic reaction as its customers including governments, coporates, and individuals, were everywhere around the world.  For Morgan and Goldman, these two fundmentally healthy companies was nearly slaughtered by the irrational market; even worse, if the government stood aside, it might cause the collapse of the whole banking system.  In fact, the government tried to stop the ship from sinking for saving everyone instead of sending a boat to rescue the god damn bankers. 

Cupid told Psyche, "Love cannot live without trust". So do banks.  

As a matter of fact, the performance of the comtemporary financial organizations depends on how skillfully the workers leverage the company's assets.  The more they risk, the more they get paid.  Nervertheless, the pregnancy of an economic crisis usually takes several years, which means, one is encouraged to chase short-term gains yet ignore long-term loss so long as he is not the unlucky guy who meets the crisis.  This mentality exists not only in a banker but in a corporate executive as well.  If we don't reform the incentive program to top-managers, another crisis will come shortly.

I ponder what the original purposes of a bank or another bigger word, the capital market.  Aren't its purposes to fund new entreprises and to help old ones grow stronger?  However, there seems no clear line between making work efficiently and making money efficiently.  Most banks apparently went for the later before the crisis.  

Following the sub-prime crisis, the European sovereign bebt crisis rewarns us how fragile our economic system is.  

Regulation or deregulation?