May 2012 View
How About Some Real Engineering
We have now passed through more than twenty years, almost a generation, where financial engineering triumphed over any other form of engineering. Those who knew how to engineer the tide of declining interest rates and rising asset prices seemed invincible, and the refinancing of liabilities meant printing assets. At their best, Wall Street’s financial engineers have used their expertise to re-invigorate sluggish companies and dormant industries and generate sometimes generous returns for investors. At their worst they have generated billions of dollars in fees for the managers, at the expense of millions of jobs and billions of investment dollars.
