Warren Buffet calls this our financial Pearl Harbor. He’s may be more right than realizes.
Prior to Pearl Harbor, we had lots of information that could have prepared us for the sneak attack. We just didn’t have one central place to collect and analyze it. That shortcoming in our security apparatus led to the creation of the CIA.
Similarly, in mid-decade we had plenty of information about real-estate speculation, excessive leverage, and a credit-default swap market that could combine to cause a financial meltdown. But there was no centralized financial intelligence agency that could recommend preventative action.
As we study what went wrong with the world’s financial architecture, hopefully one recommendation will be an omnibus authority that would be charged with collecting and analyzing data on global markets and money. While such an agency can’t prevent all crises, it might help us to be more prepared for the next one.
Douglas R. Tengdin, CFA
Chief Investment Officer
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