Comments on: Kay’s Other People’s Money

By: Djolds1

Djolds1 — Mon, 02 May 2016 06:41:55 +0000

I realized long ago that efficiency and redundancy are inherently contradictory ideals. The efficient is the one shortest and least-energy path from point A to point B. Everything extraneous to that single shortest path is inefficient. The redundant requires the investment of extra resources to keep additional small-world network paths open, including those few but critical long-distance connections that preserve the six degrees of separation.

To maximize profits finance always fetishizes the efficient over the redundant and robust, and that always leads to eventual institutional implosions. The failings of human nature are perennial.

By: A Boy and His Dog

A Boy and His Dog — Mon, 02 May 2016 01:02:38 +0000

The finance industry’s incentive system doesn’t reward this kind of big picture thinking at all. It rewards small-scale projects that bring immediate profit, usually at the cost of increasing fragility — not to mention time and effort wasted chasing nickels from low-return gimmicks rather than improving products for scalability, supportability, redundancy, etc. After 15 years in the finance industry I got tired of banging my head against that wall and found something better to work on. Most people would be shocked at how ad-hoc the entire financial system really is.