There's no denying everything in the world has gotten more complex. From electronic components in our automobiles to the electric grid, the more complex things have gotten, the more we have come to depend on them.
In their third-quarter letter to investors, which was obtained by Hedge Fund Alpha, the Elliott Management team said that financial authorities are doing a good job putting out fires when problems arise, but they don't think that's the best way to handle things.
Calling on the authorities to shore up critical systems
They opined on the complexity of the financial system, noting that mini-crashes and "discontinuities" now occur more often than they once did. The Elliott team noted that complicated derivatives and steadily rising leverage make the financial system more complex.
"The authorities have been quick to put out fires as they arise, but we are skeptical that rushing around and fighting fires as they break out — while continuing to put gasoline and matches everywhere — is the right way to prevent an advanced society from burning," Singer's team wrote. "In the physical realm as in the financial realm, leadership is failing to do the hard but necessary work of convincing citizens that we need to build greater robustness and sustainability into these vital systems — watching TikToks in the driverless EV cab is easier and more fun."
