Summary
The drama and tumult of recent events are not symptoms of the disease, but the cure. The "disease" is the excessive debt and leverage in the financial system. The "cure" is the reduction of the level of debt (the great "de-leveraging").
Fairy tales in financial markets focus on the "superhuman" abilities of regulators and governments to avoid the de-leveraging under way.The Arabian Nights had a happy ending. The King after 1,001 nights of enchantment and three sons pardons the beautiful Princess [Scheherazade] who becomes his queen. Despite the fairy tales that investors are putting their faith in, the de-leveraging that is at the heart of the current financial crisis may not have such a happy ending.See the full content of this document
Extract
The Cure Not the Disease
In the Arabian Nights, the beautiful princess Scheherazade buys one day of life at a time by recounting fantastic fables that entrance the King who has condemned her to die. Investors and traders are currently telling each...
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