capitalism
Should a loan that one neither intends nor is required to repay be considered debt or equity?
Markets frequently fail, despite their pristine reputation among capitalists. One way is the many actions taken by buyers and sellers to tilt a transaction in their favor. These visible hands create asymmetries between the parties. Jason Voss, CFA, explains.
Markets are usually not systemic. Instead, from the bird’s-eye perspective of "Capitalism," many businesses are "opportunities" in the same way that it feels good to hit yourself in the head with a hammer: It's much better once you stop.
Drawing on his extensive economics expertise, Robert Guttmann dives deeply into the topic of innovation as it relates to economic growth. The book is impressive in scope and groundbreaking in addressing both the positive and negative effects of financial innovation on society. The author discusses the global financial crisis as well as other historical financial crises to explore the ways innovation has enriched and endangered society.
Markets are useful but imperfect, says Jason Voss, CFA. One imperfection is that they assume fungibility. Assuming that a dollar spent on one thing is equivalent to a dollar spent on something else has serious consequences for investors.
Markets assume a context entirely out of view of their participants, which can have deleterious effects for both suppliers and demanders, Jason Voss, CFA, observes in the latest installment of his Where Markets Fail series.
Markets are useful, but imperfect, Jason Voss, CFA, explains in the first installment of his Where Markets Fail series. One glaring flaw is their inability to discount the future. This results in many deleterious and often long-term consequences.
The Yale University economics professor reminded delegates at the CFA Institute Financial Analysts Seminar last week that cynicism about finance and financial innovation is a symptom of misplaced frustration with today's crises.
Modern banking system bailouts fly in the face of the ancient capitalist philosophy of losses signaling market risks. In addition, financial bailouts tend to escalate in size and damaging effects with time.
A major and ancient tenet of capitalism is the importance of losses to preserving the efficiency of markets. Yet modern banking system bailouts fly in the face of this perennial philosophy.