The current Scientific American (May, 1998, p92) has an excellent
article on 'financial engineering' -derivatives et cetera, and
The Economist (May 9-15, 1998, p71) a short one on
'securitization'. 'Very interesting' about these phenomena, the
first primarily, is (i) the relative openendedness (absence of
regulatory oversight) of this 'continuing financial evolution'
and (ii) the relative absence of concern by economists who
(passive profession) are not, strictly speaking, 'in the
financial game' -but should be concerned about it, no???
The effect of these operations is one of generally dampening
financial discontinuities (budding catastrophes?) in the
hierarchic business/financial world -noise reduction, a 'general
good'; there is, thus, something of a 'value added'. Such
'service' however, is inseparable from 'sucking on the system',
from the idea (primitive) of 'getting away with as much as
possible' -doing as little work possible. There is, in fact,
virtually no understanding (or _analysis_) of what we, the
public, pay for that 'service' -certainly an economics matter
-no? -nor do the service players care what economists think!
I leave with my opening comments about the relative openendedness
and _absence of regulatory oversight_ (wild west?) that I think
economists should be concerned about and that I believe is most
certainly 'the stuff of the profession'.