Two excerpts from Rational Irrationality: The real reason that capitalism is so crash-prone.

What boosts a firm’s stock price, and the boss’s standing, is a rapid expansion in revenues and market share. Privately, he may harbor reservations about a particular business line, such as subprime securitization. But, once his peers have entered the field, and are making money, his firm has little choice except to join them. C.E.O.s certainly don’t have much personal incentive to exercise caution. Most of them receive compensation packages loaded with stock options, which reward them for delivering extraordinary growth rather than maintaining product quality and protecting their firm’s reputation.

Here is another on financial innovation, which made me think of my bank post:

Limiting the development of those securities would stifle innovation, the financial industry contends. But that’s precisely the point. “The goal is not to have the most advanced financial system, but a financial system that is reasonably advanced but robust,” Viral V. Acharya and Matthew Richardson, two economists at N.Y.U.’s Stern School of Business, wrote in a recent paper. “That’s no different from what we seek in other areas of human activity. We don’t use the most advanced aircraft to move millions of people around the world. We use reasonably advanced aircrafts whose designs have proved to be reliable.”

For the first time in his life Rahn met someone even more obsessed with finding the Grail than he was. Indeed, so confident was Himmler of finding the Grail that he’d already prepared a castle – Wewelsburg in Westphalia – for its arrival. In the basement, surrounded by busts of prominent Nazis, was an empty plinth where the Grail would go.

The original Indiana Jones: Otto Rahn and the temple of doom. Truth is stranger than fiction.

Apparently advertisers who take the tour have been known to drool ovr the opportunities of putting recipes on the kitchen counter and apparel recommendations in the closet. It will come true — advertisers abhor blank space like nature abhors a vacuum.

The home of the future?, Rob Norman

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