Tuesday, October 21, 2008

The Speculators That Can't Be

History's a fickle mistress. It can teach us a great deal about ourselves and what to expect, but it can also delude us. Exceptions (which are always more memorable than the mundane) distort our view of how the world works. Writer David Liss referenced a speculator friend of Alexander Hamilton (the first United States Secretary of the Treasury) who used his inside knowledge to make quick profits. His actions nearly caused a financial catastrophe in the fledgling union. In light of the current crisis, Liss ponders when we will learn our lesson?

Liss paints speculators as wild-eyed children. They have no concept of the future, a strange attribute for people who make a living estimating what will come to pass. Speculators cannot survive as an occupation the way Liss described them. Not only would our current volatility be the norm, Warren Buffet would be broke.


jeremy h. said...

Speculators? Or is this Smith's impartial spectator?

David said...

Oops; good catch. Speculators.