JUST WONDERING

This is going to be quite short. I decided that what with all that was going on this week it would be a bit silly to jump the gun and comment on things that might well have changed my comments...or to put it another way I am determined not to make a fool of myself. Or a bigger fool as the case may be.

Anyway, there is no doubt that the banks are under the gun regulatory-wise and the world is probably going to change a bit. No one wants a repeat of the past 12 months but coming up with the proper formula is the tricky part. Also putting a fence around the likes of Chris Dodd who is clearly a nincompoop at best and a crook at worst is going to be very important. Dodd is now proposing a merger of the four major oversight bodies in to one super oversight agency, now doubt to make it easier for Congress to exercise oversight over that new monstrosity ignoring, among other things, the fact that under a change of government which will almost surely occur, the U.K., our traditional partner and home to the second largest financial market in the world will move in precisely the opposite direction. Caution: Genius at work. Just a random thought.

Now have you ever thought about which came first the chicken or the egg? We all have but did you know that in the finance world there is a question almost as old and just as perplexing: what comes first the product or the market? Or, as bankers like to phrase it, the buy side or the sell side?

We have been spending great deal of time wacking bankers upside the head and with good reason but do half the Great Unwashed out there know which side of this conundrum they are wacking? Betcha they don't. Betcha they don't realize it's the buy side. Any bets? No? Well you see without the people to whom one can sell this ugly stuff that was created, there would have been no problem. Therefore, the question that really should be asked at some point is who created the market?

When I was a young man well back in the last century I was told that before we could (or should) create (buy) product we should have a distribution system into which to sell it. I always wondered what one sold if one had no product but that is the crux of the question, isn't it. Now there is no question that there was some God-awful crap created over the past few years but it was sold to someone who bought it. Now was the demand created by the creators or was it demanded by the buyers? And if the latter, does that throw a whole new light on the issue? And if does, should we also attempt to limit the creation of demand? Just wondering...more tomorrow as we await the great events of the week.