The hazardous and morally-challanged elephant

So the web is lit with talk of proposals for rescue packages, China, G20 meetings (both of them), a giant IMF, Bretton Woods II, etc. But nobody is addressing the cause of this and all the bubbles: moral hazard. The market has failures. Legislation and regulators must exist, but so far there has been very little mentioned about the droll issue of new regulatory tools and expanded powers of surveillance.

It feels nice to have hope that some huge bailout package (if you ignore the fact that you are paying for them) will swoop in and save the day. It is sexy, and it makes headlines. It is also necessary to minimize the current crisis. But if you want to look at the future, a new structure that works hand in hand with the market to create counter-bubbly incentives is required. If this is not given the importance it deserves, the next bubble will also take us by "surprise".

No one could've predicted that history would, and will repeat itself...