The Irish Independent reports that the minister responsible for the €60m e-voting debacle remained defiantly unapologetic last night for the most notorious example of the waste of taxpayers' money in the Celtic Tiger era.
Tourism Minister Martin Cullen defended the botched electronic voting system and bizarrely suggested a similar system might be used in the future.
Mr Cullen's remarks will fuel public anger at the lack of accountabilty over millions of euro being squandered. It will also reinforce the perception of a Government unable to admit any mismanagement of the public finances over the past decade.
It comes after two damning reports by the spending watchdog, the Comptroller and Auditor General, which outlined a shocking litany of overspending across the public sector.
Tanaiste Mary Coughlan and Taoiseach Brian Cowen have not sought the resignation of the FAS board, despite revelations of massive waste at the state training agency.
Instead, the FAS board will await the arrival of a new board once an unpublished piece of legislation is passed at some stage -- although there is no timeline available.
Mr Cullen's defiance comes just days after Environment Minister John Gormley announced plans to try to sell off the e-voting machines, with adverts to be placed in newspapers.
When asked by the Irish Independent if he felt he owed the taxpayers an apology, Mr Cullen said e-voting had been successful during trials.
He blamed the bar being "raised very high" -- a reference to the public concerns which prompted an investigation into the security of the system.
"E-voting, as you know, was trialled twice in the country and it was very successful. Issues arose afterwards where the bar was raised very high in the context of all of the issues surrounding it. But it's interesting, I think it was covered during the week. I saw an article which said the only way forward for Ireland is to use e-voting. It's a far more secure system than the system that we use at present and it remains for others for the future to see what happens with it," he said.
The plan to roll out e-voting came to a halt in 2004, when a report found the system needed to be adjusted to make it secure. But this was after almost €52m was spent on buying enough machines to cover the country and contracts worth €800,000 a year for storage were signed.
Mr Gormley pulled the plug on e-voting earlier this summer, taking the decision to end storage of the 7,000 machines.
He said it would have cost €28m to make the machines foolproof in terms of hardware and software, with it unlikely even then that there would be sufficient voter buy-in.
Meanwhile, Ceann Comhairle John O'Donoghue is set to reveal details of his travel expenses while he was a minister when the Dail resumes on Wednesday.
Documents released under the Freedom of Information Act claimed the foreign travel bill for Mr O'Donoghue and his wife amounted to more than €100,000 while he was Arts, Sports and Tourism Minister.
But his solicitors have written to at least one Sunday newspaper claiming information in articles relating to the expenses was "inaccurate, misleading, exaggerated and disingenuous" and that Mr O'Donoghue would be taking further steps.
The Irish Independent also reports that Banks going out cap-in-hand to investors for equity over the next year must convince investors they have a clear understanding of where risks lie right across their business, according to Alastair Blair, head of financial services with consultants Accenture.
A global survey by Accenture has found that risk management now tops the corporate agenda, after the virtual collapse of the financial system when US investment bank Lehman Brothers went bust a year ago this weekend.
But 85pc of 250 firms surveyed -- including five Irish companies -- believe they must improve the way they align business strategy and risk appetite.
Some 82pc said that risk awareness has to improve across businesses; and 85pc believe firms will have to weigh up more carefully all possible risks and returns.
The Irish Times reports that government plans to establish the National Asset Management Agency (Nama) have suffered a significant setback with only 13 per cent of the attendance at a Green Party conference expressing support for the legislation in its current form.
The Nama Bill came in fourth out of six options placed before an all- day meeting of more than 140 Green activists from around the country held in Athlone, Co Westmeath.
The most popular choice at 23 per cent was for an agency which would pay only the current market rate for loans transferred to the banks.
In second place at 20-21 per cent was the so-called “Swedish solution”, which would also mean paying only the market price for loans.
This will place further pressure on Minister for Finance Brian Lenihan, who is to announce the valuation he will place on bad loans in the Dáil on Wednesday.
Although Green Party activists voted by a large majority to withhold the results of Saturday’s “preferendum” for the time being, The Irish Times understands the results were as follows:
1) Nama with strong Green Party policy conditions and only current market values being paid for transferred loans: 23 per cent;
2) The “Swedish solution” with each institution forced to write down its loan book to current market values and the possibility of separate asset management companies for individual banks: 20-21 per cent;
3) A free-market, laissez-faire approach, with banks left to fend for themselves: 14-15 per cent;
4) The Nama legislation in its present form: 13 per cent;
5) Partial nationalisation, with a “good bank” to assist small and medium enterprises: 12-13 per cent;
6) Full nationalisation: 12 per cent.
Green Party sources have cautioned strongly against premature interpretation of the vote as a signal that the party would walk out of the Government.
The attendance at the special policy-making convention on Nama and the renegotiated programme for government on October 10th would have an attendance three or four times greater than last Saturday’s consultative session.
However, the vote is still likely to cause concern among the party’s coalition partners.
Pressure will increase on the Green Party leadership to win further concessions and on Fianna Fáil to agree to them.
Green Party sources said there was “a very intense debate” about the valuation announcement to be made by Mr Lenihan.
The format of the special convention on October 10th, which will be crucial for the future of the Government, remains unclear and is likely to be strongly influenced by negotiations on the programme for government.
The Irish Times also reports that legislation to restructure Fás at the highest level is expected to be ready in four weeks after the announcement that the board of the State training agency is to resign.
Government Chief Whip Pat Carey said last night: “It should be possible to get it through both houses of the Oireachtas reasonably quickly.”
Tánaiste and Minister for Enterprise Mary Coughlan has been sharply criticised by Opposition parties who claim she took a “hands-off” approach and, along with Cabinet colleagues, completely failed to supervise the agency, which has come in for damning criticism over excessive expenditure.
A spokeswoman for the Department of Enterprise, Trade and Employment confirmed yesterday that former Fás director-general Rody Molloy received a top-up to his pension as part of his agreement to leave the agency this year.
The planned resignation shortly of the board should not represent an end to the changes at Fás, said Fine Gael enterprise spokesman Leo Varadkar. Senior executives in Fás “who were directly responsible for the type of reckless spending that the Comptroller Auditor General has criticised severely should also be held accountable for their actions.
“For too long Minister Coughlan has adopted a hands-off approach to this issue and acted as if it was someone else’s responsibility to deal with these matters.”
Labour social affairs spokeswoman Róisín Shortall said: “The position of the board members has been untenable since the extent of the waste of taxpayers’ money in Fás first became public.
“It is also very evident that there was a total lack of political supervision of Fás at Cabinet level.”
Ministers had to face up to their responsibilities, she said. “As recently as Thursday last, Mary Coughlan was refusing to act, despite the damning findings of the report of the Comptroller Auditor General.”
However, there was no response from the Tánaiste to a claim by Fás chairman Peter McLoone that the board was twice told by the Government this year to stay on and clear up “the mess” it had found itself in.
He told RTÉ Radio’s This Week programme yesterday that the board got a “clear direction” from the Minister and the Government in February to stay on, after a damning report from the Dáil Public Accounts Committee (Pac) on Fás expenditure was published. That report was highly critical of the agency’s inappropriate spending on first-class flights and luxury travel.
Again in June, after Fás appointed a new director-general, it was told by the Government to continue doing its job, he said. It wasn’t, he added, until last Thursday night or Friday morning that the board became aware the Government’s position had changed.
On the question of Mr Molloy’s pension, the department spokeswoman said the former Fás director-general received an additional 4.5 years of service to his pension to bring him to the maximum 40 years of service limit required for him to receive a full pension entitlement.
This deal was agreed with the Tánaiste and sanctioned by the Department of Finance. The spokeswoman said she could not put a value on this addition to Mr Molloy’s pension. Commenting on the decision to award Mr Molloy the extra years service for his pension, the spokeswoman said: “In order to ensure a speedy and non-litigative departure [of Mr Molloy], this was considered to be in the best interests of the Fás organisation and the taxpayer.”
The Irish Examiner reports that trading gold for cash can result in a loss of 75% in the value of jewellery.
Over the last year the number of companies offering cash for gold has ballooned, but experts have warned that more money can be made selling a TV in a yard sale than on old jewellery.
Mark O’Byrne, director with investment firm, GoldCore, said companies offering cash for gold offer anything between 55% to 72% of the value of the jewellery.
However, he warned that this is in addition to a massive loss already incurred by the jewellery owner if they decide to go ahead with the sale.
"Selling jewellery results in significant losses. The mark-ups by jewellers are very significantly over the actual gold price – by some 250% to 400%. Then there is VAT on top of this huge mark-up.
"When consumers go to sell, they are receiving less than 75% of the actual gold content or value," he said.
Mr O’Byrne said, if a necklace is bought for €2,100 and the owner decides to sell it, they might get back around €440.
"At the same time, if you are in dire straits financially and have jewellery that has no sentimental or nostalgic value and need the money, it could be considered, but be sure and shop around," he said.
Mr O’Byrne said, however, that he does not think firms offering cash for gold are "ripping people off" he just does not believe that selling gold in this way offers the best value.
"There are lots of ways to sell things these days, on eBay or at a yard sale," he said.
Gold has been seen as an attractive investment in times of inflation and has risen 13.6% in value this year.
Sandra Close, an analyst at Surbiton Associates, said: "There are questions out there over the health of economies, where interest rates are going. All that encourages gold hoarding," she said.
Gold reached an all-time record of $1,032 (€706) an ounce in March 2008.
The Financial Times reports that the credit crunch in Europe worsened over the summer as corporate bond finance issuance failed to plug the gap left by a sharp contraction of bank lending.
Net lending by banks went further into negative territory in July as companies paid back more loans than they took out new ones.
Loans outstanding contracted by a net €25bn ($36bn) in the month, the fifth successive month of an increasing shrinkage of supply.
At the same time, there was a retreat in the recent record corporate bond issuance.
Bond issuance in July declined for the first time since March, by €20bn month on month to €27bn, although bankers are convinced that it was only seasonal.
Bankers said the July trends had continued into August and would affect smaller companies most severely.
Morgan Stanley, which compiled the credit crunch numbers from central bank data and Dealogic, said the scant availability of bank lending would penalise smaller companies that have no access to bond markets.
“As Europe’s commercial banks de-lever, lending is likely to be squeezed,” said Huw van Steenis, banks analyst.
According to Morgan Stanley, there was €319bn of corporate bond issuance in the first seven months of the year and a decline of €33bn in European bank-originated loans.
That marked a reversal of the balance of corporate funding from the same time last year, when bank loans totalled €356bn compared with corporate bond issuance of only €119bn.
Banks across Europe have insisted in recent months any decline in lending is due to a fall-off in demand, not supply.
The FT also reports that standard measures of economic performance must be overhauled to reflect “well-being” and to help policy-makers tackle financial instability and climate change, an international panel of economists will urge on Monday.
The commission, led by Joseph Stiglitz, was set up last year at the request of Nicolas Sarkozy, president of France, who was concerned about popular distrust of economic statistics. Mr Sarkozy will launch the commission’s report in Paris on Monday.
Writing in Monday’s Financial Times, Mr Stiglitz, a Nobel prize-winning professor at Columbia University, says flawed measures of economic output, such as gross domestic product, could encourage governments to make bad economic, social or environmental policy choices.
“What we measure affects what we do,” he says. “If we have the wrong metrics, we will strive for the wrong things. In the quest to increase GDP, we may end up with a society in which most citizens have become worse off.”
The suitability of measures has been the subject of intense debate among economists for decades. As a measure of market activity, it arguably does not accurately reflect the benefits of publicly provided health and education.
Meanwhile, things considered detrimental to society, such as congestion or crime, may add to GDP through higher fuel consumption or higher spending on prisons. Oil pumped out of the ground and sold to customers is counted as an addition to a country’s wealth but not as a depletion of its resources.
The New York Times reports that when President Obama travels to Wall Street on Monday to speak from Federal Hall, where the founders once argued bitterly over how much the government should control the national economy, he is likely to cast himself as a “reluctant shareholder” in America’s biggest industries and financial institutions.
But one year after the collapse of Lehman Brothers set off a series of federal interventions, the government is the nation’s biggest lender, insurer, automaker and guarantor against risk for investors large and small.
Between financial rescue missions and the economic stimulus program, government spending accounts for a bigger share of the nation’s economy — 26 percent — than at any time since World War II. The government is financing 9 out of 10 new mortgages in the United States. If you buy a car from General Motors, you are buying from a company that is 60 percent owned by the government.
If you take out a car loan or run up your credit card, the chances are good that the government is financing both your debt and that of your bank.
And if you buy life insurance from the American International Group, you will be buying from a company that is almost 80 percent federally owned.
Mr. Obama plans to argue, his aides say, that these government intrusions will be temporary. At the same time, however, he will push hard for an increased government role in overseeing the financial system to prevent a repeat of the excesses that caused the crisis.
“These were extraordinary provisions of support, not part of a permanent program,” said Lawrence H. Summers, director of the National Economic Council at the White House. “You’re seeing a process of exit every day. It’s a process that’s going to take quite some time, but the prospects are much brighter today than they were nine months ago.”
That process unfolds every day in a bland bureaucrat’s haven, an annex connected by an underground tunnel to the Treasury’s main building on Pennsylvania Avenue. There, about 200 civil servants — accountants, lawyers, former investment bankers — oversee the $700 billion program that pumps taxpayer money into banks, insurance companies and two of Detroit’s Big Three auto companies.
In the main Treasury building, senior officials hold veto power over executive pay packages for the biggest recipients of government loans, like Citigroup and Bank of America. A separate group, working closely with the Federal Reserve Bank of New York, oversees the multibillion-dollar bailout of American International Group. Ten blocks away, at the Federal Reserve, officials are still providing the emergency liquidity that keeps a battered economy moving.
To Mr. Obama’s critics, thousands of whom took to the streets of Washington this weekend to protest a new era of big government, all these efforts are part of a plan to dismantle free-market capitalism. On the ground it looks quite different, as a new president and his team try to define the proper role, both as owners and regulators.
A Light Hand on the Reins
Far from eagerly micromanaging the companies the government owns, Mr. Obama and his economic team have often labored mightily to avoid exercising control even when government money was the only thing keeping some companies afloat.
A few weeks ago, there were anguished grimaces inside the Treasury Department as the new chief executive of A.I.G., Robert H. Benmosche, whose roughly $9 million pay package is 22 times greater than Mr. Obama’s, ridiculed officials in Washington — his majority shareholders — as “crazies.”
Causing even more unease to policymakers, Mr. Benmosche insisted that A.I.G. — one of the worst offenders in the risk-taking that sent the nation over the edge last year — would not rush to sell its businesses at fire-sale prices, despite pressure from Fed and Treasury officials, who are desperate to have the insurer repay its $180 billion government bailout.
But in the end, according to one senior official, “no one called him and told him to shut up,” and no one has pulled rank and told him to sell assets as soon as possible to repay the loans.
A similar hands-off decision was made about the auto companies. Shortly after General Motors and Chrysler emerged from bankruptcy, some members of the administration’s auto task force argued that the group should not go out of business until it was confident that a new management team in Detroit had a handle on what needed to be done.
But Mr. Summers strongly rejected that approach, and the Treasury secretary, Timothy F. Geithner, agreed.
“The argument was that if the president said he wasn’t elected to run G.M., then we couldn’t hire a new board and then try to run any aspect of it,” one participant in the discussions said. The auto task force took off for summer vacation in July, and it never returned.
But it will probably be several years before the government can begin to sell its stake in G.M. back to the public, and even then, according a report issued last week by the independent monitor of the Troubled Asset Relief Program, some of the $20 billion or so funneled to G.M. and Chrysler is probably gone forever.
Winding Down Programs
By contrast, Mr. Obama’s team and the Federal Reserve have been more successful than generally recognized at winding down many of the support programs for banks. Nearly three dozen financial institutions have repaid $70 billion in loans to the Treasury, and officials predict that $50 billion more will be repaid over the next 18 months. Indeed, the government has earned tidy profit on the first round of repayments.
One of the biggest backstops has been the Temporary Liquidity Guarantee Program of the Federal Deposit Insurance Corporation, which now guarantees about $300 billion worth of bonds issued by banks.
The volume of new guarantees has declined to less than $5 billion a month in August from more than $90 billion a month earlier this year. The F.D.I.C. announced last week that it would either end the program entirely on Oct. 31 or reduce it further by substantially increasing the fees that banks have to pay.
Similarly, one of the Fed’s biggest emergency loan programs, the Term Auction Facility, has shrunk by more than half in the last 12 months. A second big program, which finances short-term i.o.u.’s for businesses, has shrunk to $124 billion, from $332 billion a year ago.
Obama administration officials bristle at even the hint that their rescue measures have ushered in a new era of “big government.”
But supporters and critics alike worry that it will be difficult to shrink the government to anything like its former role. For one thing, Mr. Obama is determined to expand government regulation of business and to beef up federal protections for consumers.
Seeking More Oversight
Mr. Obama’s proposals to overhaul the system of financial regulation would give the Fed new powers to supervise giant financial institutions whose failure could threaten the entire financial system.
To limit the dangers posed by insolvent institutions that are “too big to fail,” the F.D.I.C. would receive new authority to close them in an orderly way.
The administration would impose much tougher regulation over the vast market for financial derivatives like credit-default swaps and other exotic instruments for hedging risk.
It would also create an entirely new Consumer Financial Protection Agency, which would have broad power to regulate most forms of consumer lending.
In his speech on Monday, White House officials say, Mr. Obama will step up pressure on Wall Street to accept tougher oversight. Even though his proposals have made little headway in Congress, largely because of the battle over health care, Democratic lawmakers said they were determined to pass comprehensive legislation by next year.
“Big government now is the consequence of too little government before,” said Representative Barney Frank, chairman of the House Financial Services Committee. “What you have right now, with the government owning companies, is the result of insufficient regulation before.”
On a practical level, experts say it will take years for the government to unwind some of its rescue programs.
Thanks to the mortgage crisis and the collapse in housing prices, private investors have fled the mortgage market, and the federal government now finances about 9 out of 10 new home loans in the United States.
The Treasury took over Fannie Mae and Freddie Mac, the government-sponsored finance companies that own or have guaranteed more than $5 trillion in mortgages, in the first week of September 2008. Fannie and Freddie now buy or guarantee almost two-thirds of all new mortgages. The Federal Housing Administration guarantees another 25 percent.
The cost of keeping the two giant companies afloat has been huge. The Treasury has provided Fannie and Freddie with $95 billion to cover losses tied to soaring default rates and losses in value on their own mortgage portfolios. Analysts predict that the companies will need considerably more in the year ahead. At the same time, the Fed is buying almost all the new mortgage-backed securities issued by Fannie Mae, Freddie Mac and the F.H.A. Buying up those securities drives up their price and pushes down their effective interest rates, and ultimately lowers borrowing costs to homebuyers.
An Enormous Scale
The scale of the Fed’s intervention has been staggering. The central bank has acquired more than $700 billion in mortgage-backed securities so far, and officials have said they will buy up to $1.25 trillion — a goal that should take the Fed until early next year. To help Fannie and Freddie raise the money they need to buy mortgages from lenders, the Fed is also buying $200 billion of their bonds.
All told, the government is propping up almost the entire mortgage market and, by extension, the housing industry.
As the government backs away from its rescue operations, economists and others worry about unknown consequences. Some analysts are already predicting that mortgage rates will bump higher when the Fed stops buying mortgage securities, potentially delaying a recovery in housing.
But the much bigger puzzle is how the government will untangle Fannie Mae and Freddie Mac, with their combustible mix of taxpayer support, public policy goals and for-profit structures.
“It will be very difficult to unwind, having stepped in as big as they did,” said Howard Glaser, a senior housing official during the Clinton administration and now an industry consultant in Washington. “There is no structure, no mechanism, for private investors to come back into the market.”
Other experts and policy makers have begun to raise broader concerns. Even if the Obama administration and the Fed do manage to shrink the government’s role to precrisis levels, has the government’s immense rescue simply set the stage for more frequent interventions in the future?
“This crisis, whether it’s because of the Fed or the Treasury or Congress, has created a lot of new moral hazards,” said Charles I. Plosser, president of the Federal Reserve Bank of Philadelphia. “Once you have done this once, even though it was in a severe crisis, the temptation will be for people to figure that in the next crisis you’ll do it again. You’ve got to figure out a way to say no.”
The NYT says this time is different - - that’s what people argue every time a bubble inflates, and what they think every time they are chastened by its popping. But century after century, decade after decade and year after year, human beings irrationally exuberate all over again.
Not long ago, the housing bubble burst and brought the global economy to a standstill. Now economists, recognizing that bubbles tend to come in bunches, are on the lookout for the next market to fizzle. They say that governments, central banks and international bodies should scrutinize a few markets that look likely to froth over in the next few years, like capital markets in China, commodities like gold and oil, and government bonds in heavily indebted countries like the United States.
“Globally, a lot of money is now seeking higher returns once again,” said Rachel Ziemba, senior analyst at RGE Monitor. The steadying of the economy, liquidity injections by governments and big returns reaped early this year by investment banks are encouraging more traders to dip their toes back in the water in search of the next big thing.
“As long as compensation and bonuses are based on short-term performance in the market,” she said, “that’s going to encourage risk-seeking behavior.”
Bubbles are episodes of collective human madness — euphoria over investments whose skyrocketing values are unsustainable.
They tend to arise from perceptions of pending shortages (as happened last year, with the oil bubble); from glamorized new technologies or investment frontiers (like the dot-com bubble of the 1990s, the radio bubble of the 1920s or the multiple railroad bubbles of the 19th century); or from faddish cultural obsessions (like the Dutch tulip bubble of the 17th century, or the more recent Beanie Babies bubble).
Often they are based on legitimate expectations of high growth that are “extrapolated into the stratosphere,” as the economist Daniel Yergin, chairman of IHS-Cambridge Energy Research Associates, put it. Such is the fear over investment in emerging markets like China.
“I’m a long-term bull on Asia, but right now it’s premature to be celebrating the ‘Asian Century,’ like some investors seem to be doing,” said Stephen Roach, chairman of Morgan Stanley Asia.
The Shanghai Stock Exchange Composite Index, for example, nearly doubled from November to July before pulling back last month. “People seem to believe the baton of global economic leadership is being seamlessly passed from the West to the East. That’s going to happen, but not for another 5 to 10 years at least.”
Similarly premature excitement inflated what became known as the South Sea bubble, a 18th century mania over British trade with emerging Latin American markets. (Aside: Even the brilliant Sir Isaac Newton, seduced by the mirage of infinitely rising stock prices, lost a lot in the South Sea bubble — which is somewhat ironic, given his famous recognition that what goes up must come down.)
Economists also worry that commodity bubbles, which tend to be more cyclical, may strike again. Oil and gold prices are rising, and though both of those commodities have boomed and busted many times in the last century, investors may bet on unrealistically high growth once more. Gold prices, for example, have risen more than 30 percent from a year ago.
“With every commodity bubble, you see a whole new set of rationalizations,” Mr. Yergin said. “People find ways to shut out the reality of economic processes. If oil prices shoot up, investors are always surprised to see demand go down again.”
In each of these markets, the inflation and deflation of prices would be painful to investors but may not have as far-reaching consequences as the recent housing and credit collapses.
But a sovereign debt bubble — which many argue is driving the acceleration in gold prices — could prove far more dangerous.
So many countries, like the United States, are running up such large national debts as a percentage of their overall economies that they could risk eventual default. Even without outright default on their obligations, the value of government bonds sold to finance these deficits could plunge, costing investors a lot.
“Talk about a big bubble that really affects the global economy,” said Kenneth Rogoff, an economics professor at Harvard whose new book, “This Time Is Different,” chronicles 800 years of debt-driven financial crises.
“The huge run-up in government debt has led to patently unsustainable fiscal policies across a number of major countries,” he said. “So far, the rest of the world’s been willing to finance it, primarily with savings from China and elsewhere, but if investors’ confidence is shaken, we might see the interest rates on long-term debt rising, and rising very sharply.”
Debt crises are usually associated with developing countries, like Brazil, Argentina or Zimbabwe. But they can affect big, rich economies too, where the scale of global damage can be much greater.
“Look at California,” Mr. Rogoff said. “It’s incredibly rich, but Californians want a lot of services but don’t feel like taxing themselves to pay for them. You can be incredibly rich and still go bankrupt.”
The depth and breadth of the pain unleashed by the recent housing bust have led political leaders and central bankers to reconsider their duties to pre-empt, rather than just respond to, potential bubbles, and the same is true with the potential bubbles that economists foresee today.
China has started to tighten monetary policy to rein in the hype surrounding its equities. Politicians in the United States, while torn over the means, are discussing ways to bring the deficit until control.
The Group of 20, at its coming meeting in Pittsburgh, is expected to address ways to calm financial frenzies. The solution may involve additional regulation, guidelines for financial compensation and possibly requirements for more market transparency so that, at least in theory, investors can better judge what they are taking on.
But however stringent such new regulations may be, economists say, they cannot completely defeat human nature. Investors will continue to be hypnotized by get-rich-quick deals, seeking investments that magically double, double without toil or trouble.
“Ultimately, bubbles are a human phenomenon,” said Robert Shiller, a Yale economics professor and Cassandra of the current crisis. “People just get a little crazy.”