4 ms·

>Sometimes I wonder what the world would be like if we just said "that sucks" and required a full postmortem instead. I see that attitude working with individu

>Sometimes I wonder what the world would be like if we just said "that sucks" and required a full postmortem instead. I see that attitude working with individuals. Most people takes their responsibilities seriously. But for corporations it would never work. Corporations would do literally nothing and take the money if there were no consequences. Even when all the employees are good caring people, the corporation incentive is to maximize profit. Corporations are less than the sum of its parts when it comes to morality.

mjevans 6y ago
The consequence is that this record is on file, and arguably could be used to disqualify a corporate entity from future projects. Screwing up big enough would actually be a "corporate death sentence".
- burntoutfire 6y ago
  The rating agencies gave AAA rating to a ton of junk mortgage-based securities before 2008, largely contributing to a global financial crisis. This is literally the biggest screwup imaginable in their area of business. And yet, all of them are still doing fine. How is that possible is really beyond me.
  - redis_mlc 6y ago
    Because the rating agency is paid by the paperholder. Even worse, those rating agencies must, by law, be used by those paperholders. So it's a massive conflict of interest, though little different than companies paying the big accounting agencies that are auditing them. But it gets much, much worse ... If a board member of a large company or government agency tries to independently hire an auditor for a review of said company, the auditor will refuse - because they will not be hired by the company for future work, and also other companies or agencies. And the 1,000 or so US-listed Chinese companies to date have not been required to show any books to the SEC, let alone the "real" set of books. All should be delisted, and the CALPERS CFO, a CCP member, should be replaced. (The rabbit hole here goes very deep, as the $2 trillion Belt and Road appears to be secretly funded by US exchange listings and unpaid US bonds.)
  - AlexTWithBeard 6y ago
    This is possible, because we don't have another set of rating agencies. Will have to learn from mistakes and fix what we have.
    - burntoutfire 6y ago
      Or maybe, we can accept that we don't have good means for measuring risk, and just limit the financialisation of the economy... It would be a good thing long-term - the smaller the house of cards build by Wall Street, the less damage they do to everyone when they fall.
      - AlexTWithBeard 6y ago
        How can you limit "financialization" without at least some risk measure?
        burntoutfire 6y ago
        If you keep financial instruments simple (e.g. basic bonds), then risk is easier to measure.
barbegal 6y ago
It works for aviation though. Individual employees are protected by law (at least in some jurisdictions) to whistle blow on their employer and the evidence they provide can't be used in legal proceedings. This has been tested on multiple occasions such as in the case of an airshow disaster where the police wanted access to evidence collected by investigators https://www.lexology.com/library/detail.aspx?g=48aa5315-2d99-4096-862f-fc1c6a2e246d https://www.lexology.com/library/detail.aspx?g=48aa5315-2d99...

mjevans 6y ago

The consequence is that this record is on file, and arguably could be used to disqualify a corporate entity from future projects. Screwing up big enough would actually be a "corporate death sentence".

burntoutfire 6y ago
The rating agencies gave AAA rating to a ton of junk mortgage-based securities before 2008, largely contributing to a global financial crisis. This is literally the biggest screwup imaginable in their area of business. And yet, all of them are still doing fine. How is that possible is really beyond me.
- redis_mlc 6y ago
  Because the rating agency is paid by the paperholder. Even worse, those rating agencies must, by law, be used by those paperholders. So it's a massive conflict of interest, though little different than companies paying the big accounting agencies that are auditing them. But it gets much, much worse ... If a board member of a large company or government agency tries to independently hire an auditor for a review of said company, the auditor will refuse - because they will not be hired by the company for future work, and also other companies or agencies. And the 1,000 or so US-listed Chinese companies to date have not been required to show any books to the SEC, let alone the "real" set of books. All should be delisted, and the CALPERS CFO, a CCP member, should be replaced. (The rabbit hole here goes very deep, as the $2 trillion Belt and Road appears to be secretly funded by US exchange listings and unpaid US bonds.)
- AlexTWithBeard 6y ago
  This is possible, because we don't have another set of rating agencies. Will have to learn from mistakes and fix what we have.
  - burntoutfire 6y ago
    Or maybe, we can accept that we don't have good means for measuring risk, and just limit the financialisation of the economy... It would be a good thing long-term - the smaller the house of cards build by Wall Street, the less damage they do to everyone when they fall.
    - AlexTWithBeard 6y ago
      How can you limit "financialization" without at least some risk measure?
      - burntoutfire 6y ago
        If you keep financial instruments simple (e.g. basic bonds), then risk is easier to measure.

barbegal 6y ago

It works for aviation though. Individual employees are protected by law (at least in some jurisdictions) to whistle blow on their employer and the evidence they provide can't be used in legal proceedings. This has been tested on multiple occasions such as in the case of an airshow disaster where the police wanted access to evidence collected by investigators https://www.lexology.com/library/detail.aspx?g=48aa5315-2d99-4096-862f-fc1c6a2e246d https://www.lexology.com/library/detail.aspx?g=48aa5315-2d99...