Satyajit Das Quotes

While the changes that are necessary are actually simple, they're painful, and require courage and sacrifice. Living standards will decline in real terms. Citizens will have to save more and consume less. Working lives with lengthen. For many, retirement will be revert to being a luxury. Taxes and charges for government services will rise to match the cost of providing them. There has to be greater emphasis on the real economy - the creation and sale of goods and services. Financial institutions need to return to their actual role of supporting economic activity.

Risk management seemed to have completed its transformation into pure entertainment. Dudley seemed the epitome of a risk manager who would drown crossing a river that was 12 inches in depth on average.

The world is entering a period of stagnation, the new mediocre. The end of growth and fragile, volatile economic conditions are now the sometimes silent background to all social and political debates...

A confluence of influences is behind the ignominious end of an era of unprecedented economic expansion. Since the early 1980's, economic activity and growth has been increasingly driven by financialisation - the replacement of industrial activity with financial trading, and increased levels of borrowing to finance consumption and investment. By 2007, US$5 of new debt was necessary to create an additional US$1 of American economic activity, a fivefold increase from the 1950s.... Ever-increasing amounts of debt now act as a brake on growth.

These financial problems are compounded by lower population growth and ageing populations; slower increases in productivity and innovation; looming shortages of critical resources, such as water, food and energy; and man-made climate change and extreme weather conditions. Slower growth in international trade and capital flows is another retardant. Emerging markets that have benefited from and, in recent times, supported growth are slowing. Rising inequality has an impact on economic activity.

Traders risk the bank’s capital: they literally bet the bank, at least up to their limits. If they win then they get a share of the winnings. If they lose, then the bank picks up the loss. Traders might lose their jobs but the money at risk is not their own, it’s all OPM – other people’s money. What if the losses threaten the bank’s survival? Most banks are now ‘too big to fail’ and they can count on government support. Regulators are wary about ‘systemic risk’, and no regulator with an eye to their place in history wants the banking system to be flushed down the toilet on their watch. Traders can always play the systemic risk trump card. It is the ultimate in capitalism – the privatization of gains, the socialization of losses.

the sordid necessity of living for others.”9

"Fashion models and financial models are similar. They bear a similar relationship to everyday world. Like supermodels, financial models are idealized representations of the real world, they are not real, they don't quite work the way that the real world works. There is celebrity in both worlds. In the end, there is the same inevitable disappointment" - Satyajit Das, Traders, Guns & Money

The truth is that banks are the last feudal kingdoms, their rulers omnipotent, divine warlords. Their key lieutenants are 'ronin' (wandering mercenary samurai) who roam financial markets ready to ally themselves to any warlord for a share of plunder. This is not the place to apply the latest management theory.

In truth, a good chunk of activity in derivative markets is driven by speculation. Part of it is obscured by semantics; the boundary between speculation and investment is always hazy. If you lost money you speculated. If you made money you were investing. Or was it the other way around?

Bertolt Brecht's observation in The Threepenny Opera that eating takes precedence over morality.