the presumptions behind the last 15 years of economic 'miracle'(

"Events of the past month have shown that while risk can bedisintermediated by banks, it cannot be eliminated. Arguably, itmigrates to elements of the financial system, such as hedge funds,insurers and pension funds, which are less qualified to manage it."

Someof us have been saying this for years: that the financial engineering(derivatives securitizing bulk debt) does NOT (as has beenpropagandized endlessly) transfer risk to those parties BEST qualifiedto manage it. Logically, the presumptions behind the last 15 years ofeconomic "miracle" make little sense:

(1) that removing locality (ability to "kick the tires" ) of lending can be made safe
(2)that the judgment of a rating agency WITH NO DIRECT FINANCIAL LIABILITYFOR BEING WRONG can replace the judgment of a local lender who wouldotherwise have personal stake in being wrong
(3) that global lenders more correctly value interest vs. risk than local ones
(4)that derivatives transfer risk to the strongest parties who are "mostable to assess and manage it" (curiously most commonly corporations inlawsuit and oversight haven off-shore jurisdictions)

So whathappens when the world discovers that the entire bedrock of financial"progress" over the last 15 years is actually a gross (and logicallyfairly transparent) mistake?

Stay tuned!