Too much risk, too much reward

Preeminent 1980s economist Henry Kaufman has criticised the combination of transparent monetary policy and financial market opacity that has fuelled asset bubbles and undermined stability. Where did it all go wrong?

For those who may be too young to have been around in his heyday, Henry Kaufman, aka Dr. Doom, was one of the preeminent economists during the early to mid 1980s, when his firm, Salomon Brothers, ruled the bond markets. Kaufman had a particularly well honed ability to read interest rate trends, no mean skill when that was where the action was (during the Volcker-induced recession of 1980-1982, equities were seen as a has-been). He is also a particularly articulate speaker and writer.

Kaufman is still highly regarded. For example, after Bernanke's October presentation at the Economics Club of New York, Kaufman asked him a question from the floor. Mere mortals don't get to do that.

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