Economic crisis: The easy way out

Life is basically simple. Unnecessarily we complicate it. Even a just-born baby would know that complex derivatives have landed all of us in a deep mess. How to get out of this pit? Again we are looking for a complex solution. Central bankers are revisiting Keynes, Milton Friedman and others. Some governments consult the likes of Alan Greenspan whose words are as incomprehensible as their actions. In the process, we overlook an easy solution at hand.A 359-word thesis from John Coates and Joe Herbert of the University of Cambridge has demolished both fundamental and technical analyses of financial markets. Their answer to the ongoing eco-financial crisis is amazingly uncomplicated. Take the help of doctors. Administer extra dose of testosterone to all dealers in the money market. Market will immediately turn bullish and everyone,including synthetic hormone producers, will live happily thereafter.Here is an extract from the redoubtable New Scientist: "Financial markets driven wild by hormones 19 April 2008 Jason Palmer Magazine issue 2652 THE behaviour of impetuous teenagers is often blamed on their hormones, but could these same chemicals drive the economy? The suggestion is that the movement of money in the markets correlates with traders' levels of testosterone, a hormone linked with aggression, and cortisol, the "stress hormone". John Coates and Joe Herbert of the University ofCambridge monitored hormone swings in the saliva of 17 male traders on a London trading floor over eight days. The swings were compared with the sums a trader made or lost, and with market variations. When the traders made more money, their testosterone levels were higher, the researchers report in Proceedings ofthe National Academy of Sciences (DOI:10.1073/pnas. 0704025105) . When markets were volatile,they had elevated levels of cortisol. But which is the cause and which the effect? Furtheranalysis showed that traders who started their dayswith extra testosterone made ...The complete article is 359 words long."