Reading


"At just 587,000 words, Tolstoy refuses to provide even the most basic information"
The post Peter Dutton’s Review of War & Peace: “Needs More detail” appeared first on The Shovel.
One question for David Krakauer, an evolutionary theorist and president of the Santa Fe Institute for complexity science.
The post Does GPT-4 Really Understand What We’re Saying? appeared first on Nautilus.
Senior figures have warned that a tilt at the leadership is possible if she continues down her current path
The post Moira Deeming Narrowly Avoids Promotion appeared first on The Shovel.
Pope Francis: Ukraine war is “fueled by imperial interests of several empires.”
The post Blake Fleetwood: No Question, Ukraine Is Now America’s War appeared first on scheerpost.com.
Morale hazard can turn into a darker ‘moral’ hazard
Our current banking crisis -- and our government’s responsibility for and response to it -- underscore risks facing citizens and taxpayers backing up our banking system.
Government programs like deposit insurance and the Fed’s role as lender of last resort have been sold as “stabilization” schemes. But we are learning again some unlearned lessons from the past. Those lessons relate to two of the most important words in finance -- moral hazard.
Insured parties may take more risk, once they are insured. This isn’t necessarily immoral, just rational behavior reacting to the fact that they have insurance.
But at some point, ‘morale’ hazard can become ‘moral’ hazard, particularly if depositors and other creditors of banks are protected by the government and the public purse. Protected parties and their friends in high places may become willfully blind to downside consequences imposed on others, and use the government as a vehicle for gain for well-connected insiders while losses are socialized.
