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They invest in very limited amounts, and the amount they are allowed to invest in VC is quite limited by existing regulation, isn't it? If this crisis shows us
by rjurney 18y ago
They invest in very limited amounts, and the amount they are allowed to invest in VC is quite limited by existing regulation, isn't it? If this crisis shows us anything, its that real estate and stocks/bonds are not safe investments, and diversification into VC is nothing if not prudent.
- timr 18y agoAs far as I know, there's no law that prevents a private endowment or a pension from investing heavily in venture funds. The point is not to look at what they do today, but what they might do tomorrow if the system is left unregulated. Five years ago, the regulators didn't think that housing was a high-risk sector of the economy, either. How'd that turn out?
- rjurney 18y agoIf they didn't realize it was high risk, why were they printing money all along to keep it going?
- deleted 18y ago[deleted]
- timr 18y agoThey weren't. This is a crisis caused by debt, not currency devaluation.
- rjurney 18y agoThe causes of the crisis are complex, but home building was driven by cheap money from low interest rates. Had it not been, the bubble would have burst long ago. The fed put the petal to the metal for a long time, and kept it there because they knew housing was saving us from recession.
- jibiki 18y agoFunny, I always thought the expression was "pedal to the metal", guess I've never seen it written... To be fair, low interest rates were meant to encourage investment across the board, not just in houses. Your point, of course, is still totally valid.
- rjurney 18y agoIt is pedal to the metal. You got me grammar man! ;)
- gaius 18y agoFive years ago, the regulators didn't think that housing was a high-risk sector of the economy, either. Yes they did (here in the UK at least). That's why interest rates were kept artificially low, screwing savers (who outnumber borrowers 4:1 - you don't piss off that many voters unless you're worried).