Professor Peter Morici of the University of Maryland has been an adviser to the US Congress and government.
Wizardry. Alchemy. Lead into gold. Are these the playthings only of medieval fools?
The credit crunch tells us perhaps not. The Holy Grail of medieval science was to find the formula to turn lead into gold.
August 2007 Short-term credit markets freeze up after French bank BNP Paribas suspends three investment funds worth 2bn euros
The bank cited problems in the US sub-prime mortgage sector
During the following months, US and European banks report losses totalling hundreds of billions of dollars
The European Central Bank pumps 95bn euros into the eurozone banking system to ease the sub-prime credit crunch
The US Federal Reserve and the Bank of Japan take similar steps
And why not? Wealth without work. Everyone was for that, but we modern folks know better. Or do we?
Today, globalisation is driving down profit margins in making everything, from steel to software. If you make a profit, soon someone in China will make it begone.
But deal-making, putting companies together and taking them apart, financing it all, offers great rewards.
Then there are the risks. Making risks evaporate in the morning sun, or the shadows of Wall Street, seems to be where the wealth lies.
Enter our financial engineers. They don't deal in metals or megabytes, they deal in companies that make them.
Combining them, financing them, taking them apart, putting them together again. That's the stuff of modern fortunes.
But what of those risks? The engineers that assemble these deals say all the risks can be laid off on other engineers and their clients.
And by investing in each other, everyone's money will be safe. Profits without risk.
They even thought they could do that with sub-prime mortgages - home loans to people who really couldn't afford them.
They bought each other's debt and erased one another's risk by dealing with one another in a giant chain letter. Until someone realised that what they were trading wasn't worth a hill of beans.
The house of cards has collapsed, but were these guys the fools? Or do true wizards live on Wall Street?
Perhaps they do, because the engineers have escaped with their big paydays and bonuses, and central banks like the Federal Reserve and Bank of England are underwriting the tab to foist the bill on all of us - the taxpayers.
Who are the fools here? Perhaps you and me. The engineers have turned worthless paper into personal fortunes by sticking us with the tab.
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