The answer is not ‘no politics’, but ‘better politics’

This is a brilliant analysis of the Euro troubles. It says that the troubles are much larger. The lessons can be used in different situations. Read this article

Financial Markets, Politics, and the New Reality

Investors (naturally ) prefer ‘real’ assets like cash, commodities that get priced ‘rationally’ … You buy a piece of land because you believe that the scarcity will give appreciation.  Shares in modern stock exchanges also were believed to be in this category just as currency was.

Everything in life comes with perceptions and perceptions are shaped by experiences and they change due to events, propaganda, and new information. Politicians cope with, try to manipulate, and exploit perceptions.  As they do this they take ‘positions’, alter them, bluff, negotiate affecting perceptions and hence prices.

A politician who transforms perceptions on a lasting scale is rare. She or he is a true leader. Most politicians are happy with manipulation and exploitation of perception  because the returns are huge for them.

Even smart traders do that -manipulate and exploit perception (that an asset price will go up or down ) But since trading got reduced to statistical models traders may have lost that art. That is the reason for this hue and cry about ‘political meddling’.

Whatever you call it – politics is integral to living.  The answer is not ‘no politics’ but a ‘better politics’ if one can work for it. It is a question of true leadership.

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