Fool’s Gold: Gillian Tett lectures on shadowy world of derivatives
From the London School of Economics website:
Below is an audio recording of approximately 78 minutes where Gillian Tett takes us inside the shadowy world of complex finance and derivatives and explains how the business of slicing and dicing debt led us to the devastating global credit crunch.
Gillian Tett has worked as a journalist for the Financial Times for fifteen years. In 2008 she won the British Press Award for the Financial Journalist of the Year. This event marks the publication of her latest book Fool’s Gold :How Unrestrained Greed Corrupted a Dream, Shattered Global Markets and Unleashed a Catastrophe.
Date: Thursday 30 April 2009
Time: 6.30-8pm
Venue: Old Theatre, Old Building
Speaker: Gillian Tett
Chair: Professor Willem Buiter
This is just an advert for a book to come out in ‘months’! Come on Gillian, give some original thought for our ‘click’!
Capital markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable.
By using the greater computer power of today we can have a much higher turn over of capital in the capital market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day?
So now that we have the compute power to provide for all these transactions that will smooth out the market how do we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days.
The likes of Yahoo, Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one’s investments every 7 days (based on the specs you give the agent).
A system like this will make the financial markets work as smoothly as the local fruit market.