"I have a mind like a steel... uh... thingy." Patrick Logan's weblog.

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Tuesday, December 30, 2008

Oh My God, It's a System!

Via Andres Valloud, a list of the Madoff scheme's dupes sorted by magnitude of their losses.

What this highlights for me is that the worldwide financial system, generally, is both worldwide and a system. It's made of interconnected, independent agents, with varying motivations and levels of self-interest, all feeding back to each other filtered and transformed information, far from ideal, instantaneous knowledge.

A front page article in the Seattle Times this weekend speculated whether the regional home market would experience a rebound in 2009. The gist of the argument is that that market has been relatively untouched. I could be wrong, and whatever else, Seattle may continue to be less affected than other areas. However what I missed in the article was any recognition that Seattle is part of an overall system that continues to be sinking, and even worse: the home mortgage crisis may be not even halfway through its defaults.

Belying any glimmer of hope of a recovery, the Madoff list above provides a long list of banks and other financial institutions that clearly do not engage in sufficient diligence when investing billions of dollars. The Madoff case may be the most blatant but I imagine it is exemplary in exposing rampant negligence.

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About Me

Portland, Oregon, United States
I'm usually writing from my favorite location on the planet, the pacific northwest of the u.s. I write for myself only and unless otherwise specified my posts here should not be taken as representing an official position of my employer. Contact me at my gee mail account, username patrickdlogan.