Recipe for disaster, again

The financial blog Clusterstock discusses Martin Wolf's latest piece in the Financial Times. The money quote:

At the heart of the financial industry are highly leveraged businesses. Their central activity is creating and trading assets of uncertain value, while their liabilities are, as we have been reminded, guaranteed by the state. This is a licence to gamble with taxpayers’ money. The mystery is that crises erupt so rarely.

In what way can these meaningfully be called private business when their liabilities are shielded from market conditions by the most anti-market of institutions? As he says, the crisis is not the surprise.

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