Democracy in the market - the capacity for self-correction

While I take issue with the idea that finance executives were "trapped in a dance" they could not quit - they made choices and they are responsible for those choices; they were just mistakes and not some conspiracy against the economy - this is the best explanation of the finance crisis that I have read to date.

The financial system: What went wrong?

The Economists' warning that reregulation would be foolish and undermine the responsibility and learning about the risks and benefits of securitization that needs to take place to avoid such messes in the future is a wise one.

That, not its perfection or even just its information-producing capacity, is the brilliance of the market: it's capacity, and all of our capacity, for self-correction. That is the democratic nature of the market that liberal democracies would be ill-advised to take for granted.

Read this article if you want to understand, better, how this meltdown happened, what it says about investing in ventures that produce real value, and how to avoid this kind of problem in the future.

Benjamin Graham (and Friedrich Hayek) would just shake his head and say, "They should have read my book."

And Warren Buffet is laughing all the way to the bank.