Valium or placebos?
Sir, Lawrence Summers with “A lack of fear is cause for concern”, December 27, put his finger where it really hurts since many of us never imagined possible the huge discrepancies that exists between how nervous most investors seem to feel, in private, and how little of this risk perceptions the market seems to be transmitting through its public pricing.
Somehow it looks like either the market has lost the connection with the investors or that someone somewhere is peddling some real potent valiums or extremely credible placebos. At least when Summers says “As institutions have become more sophisticated in their approach to risk they have felt comfortable in taking positions they might have been reluctant to hold even a few years ago” we know someone has been gulping down a lot of medicine lately. So let us now pray it is what the doctored ordered and that it does not have too bad side effects.
Summers risk fear
Somehow it looks like either the market has lost the connection with the investors or that someone somewhere is peddling some real potent valiums or extremely credible placebos. At least when Summers says “As institutions have become more sophisticated in their approach to risk they have felt comfortable in taking positions they might have been reluctant to hold even a few years ago” we know someone has been gulping down a lot of medicine lately. So let us now pray it is what the doctored ordered and that it does not have too bad side effects.
Summers risk fear
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