Saturday, February 03, 2007

Out of control...again?

From Davos, Switzerland, where the men yodel
and these clueless pontificators pontificate...
This last point is important, and indeed the primary reason policymakers are increasingly useless. The marginal price of risk
is set by the one who takes it, who now resides far away from the tentacles of the central bankers. Thus when a Chinese buyer purchases US risk, he in effect enters a "no man's zone" between the central bankers of China and the US. As with all no man's zones, the financial world has its own code of conduct, one that is far removed from the teak-stained halls that the mandarins of Washington or Beijing are used to.