The First Disaster Of The Internet Age: To be clear, the Internet has done many important and useful things for the world financial system. Earnings calls are available to all comers, not just analysts; electronic trading has driven commissions to near zero; trading can happen wirelessly from anywhere at any time. Investors can track stock picks and stock pickers on Web-based scoreboards. These innovations were long overdue. But by accident, the Internet was also an enabler of the current credit crisis. It brought us together, but it also did the reverse, creating communities with narrow affinities. These are often echo chambers where people can find others like themselves—scrapbook makers or train-spotters or builders of exotic new products for the now $668 trillion (not a misprint) derivatives market.
At the same time, in making information free, the Internet has buried us in data, keeping most people from seeing the building credit storm. Rather than turning the world into a global village of empowered investors, the resulting data fog helped some Wall Street wiseguys hijack the global economy as easily as playing videogames—with instant messages and trillions of dollars in complex derivatives.
600,000,000,000,000? It's a number no one questions, but the size of the derivatives market is not as shocking as it looks: The total world market value of derivatives—the money these promises are actually worth today—is more in the neighborhood of $15 trillion. That is still huge, slightly larger than the U.S. economy.
[negritos meus; ambos os textos merecem leitura na íntegra]
