The Financial System: Proudly bringing you disasters since 1720.

The author of The First Crash: Lessons from the South Sea Bubble asks why few if any of the 4000 university professors of finance didn't see the dangers in the recent credit bubble or in the recombination of commercial banks and investment banks into universal banks and financial services firms.

Update on Thursday, November 27, 2008 at 10:52PM by Skeptic

Martin Wolf of the Financial Times laments the failure of the economics profession (with a very few exceptions) to predict the financial crisis and ponders the causes and implications in this speech today. 

He speaks, inter alia, of enslaved minds rather than the more common groupthink diagnosis.

Keynes said, of course, that “practical men . . . are usually the slaves of some defunct economist”. So, of course, are economists, even if the defunct economists are sometimes still alive.