Market Meltdowns and Oil Spills

When listing to the radio and more news about the San Francisco oil spill, I heard some official wonder how it could all be possible - how, with all the GPS systems and electronics and procedures put into place that a freighter with an experienced pilot at the helm could hit into a bridge, open a 90 foot rip, and pollute the bay. At that moment, I realized this is the equivalent thought that had been going through the mind of every CEO dismissed or pushed out from one of the large banks, of the head of every investment department, of everyone in every board room. How could this have gone wrong? We had all the best computers and software, most highly paid experts and geniuses.

They did, and the mistake was to trust that it's possible to mechanically cheat the law of averages. Technology is fine, when used, but it isn't an omniscient and tireless protector. It can't think and doesn't have the flexibility to react to situations that are beyond programming. Technology only does in an efficient manner what people understand how to perform. Experts and mathematicians and economists can make amazing calculations, but they are still only approximations of reality that work the way they were designed. As conditions move past assumptions, the results fall apart.

We're back to the same word: risk. If you're going to make money, there's a risk you could lose it. The more money you make off your capital, the bigger the chance of loss. That, my friends, is the way of life. According to Hollywood insider Alec Baldwin, we've even seen this attitude in the results of the studios.

People, including those in high positions in business, want something for nothing, and when they can't get it, they want a guarantee that their losses won't be too painful. If all the people who called for letting the market do what it knows best were sincere, they would watch as entire large companies melted down. That is how the market tries to deal with it - through brutal and overwhelming force as punishment, so people will hopefully learn that when you touch a hot stove, you'll be burnt if you're not careful. But businesspeople aren't sincere in what they want. That's why no one will learn anything from the current market turmoils, why things will continue to spin out of control, and why we're all going to pay a potentially huge price, as those who set things into motion refuse to.