It’s been said that if you look around the table and can’t figure out who the sucker is, you’re it. Mike Masnick thinks changes to the system – actually a “radical” shift towards complete transparency in the financial markets – will cure what ails it.
The premise is correct – there will always be a “last sucker”. But to assume that by overhauling the processes information intermediaries (primarily accountants and ratings agencies) employ in informing the investing public is likely to reduce the number of suckers could be wishful thinking.
The desire to be the hero, the portfolio (or in the case of bureaucracies, budget) savior, is ego-driven. Produce great returns by buying this or that product, watch it fly, and then a pat on the back (or a bonus) from the boss. In order for 100% transparency to affect positive decision making, there must also be incentives in place to do the homework.
And harsh punishment for failing to.