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Posted by on Mar 31, 2010 in Economy, In The News, Markets, TG Roundup

Do Leeches Produce Blood?

Now, try to take this image out your mind. This is how I see these banks in their current form. My question is, do leeches produce any blood? What value does a bloated financial sector has in the economy? I would say, it is a negative value.

Volker agrees with my take. (via NY Times):

“The question that really jumps out for me is, given all that data, whether the enormous gains in the financial sector — in compensation and profits — reflect the relative contributions that sector has made to the growth of human welfare,” Mr. Volcker said.

….

“There is an expectation that very large and complicated financial institutions will not be allowed to fail,” he said. “Unless that conviction is shaken, the natural result is that risk-taking will be encouraged and in fact subsidized beyond reasonable limits.”

To answer the question posed in the title of this post – No! Leeches live off the blood of other animals!