The problem is we hold onto the myth that greed is integral to the success of Capitalism.
The reason this myth hasn’t been universally denounced is because it is caught up in language and how we choose to define greed.

Ambition is defined as a desire for rank, fame, money, power, or to achieve a particular end.
It does not speak to the motivation for that desire or one’s intentions after having achieved the desired end.
It is neither good nor bad, but is generally regarded as a virtue and the driving force fueling competition.

Greed is often defined as an excessive desire to acquire and possess more than one needs or deserves.
The key element (the element distinguishing from ambition) is ‘more than one deserves’ since what one actually needs is arbitrary.

By one interpretation, greed offers the most practical incentive for people to work harder than the next guy, get a good education, invest in a business, and acquire wealth. This implies hard work, ability and determination and is, by definition, not really greed. This is actually just ambition and can be good and healthy and a necessary component of our economic system.
Another flavor of greed is being the motivating factor to lie, cheat, scam, and do other unethical or illegal things in order to achieve one’s ambitions. This form of greed defies the tenets of the free market.

The blanket statement “Greed is good” ignores such distinctions of interpretation enabling cheaters and, in turn, degrading the free market system. As a matter of common sense, we can say “Love is good”, but when we further qualify it to love hurting people or loving a child sexually, it no longer holds water. So the legitimacy of the statement “Greed is good” is more a matter of language than of ideology.

In the most basic sense, a Venture Capitalist is just another job in the free market system.
The responsibilities are to analyze and speculate as to the actual value of commodities, stocks, etc. and invest accordingly thus driving the free market. If you do your job well you should make a profit, but this alone does not imply greed. I think we can all agree the system works when properly checked and balanced, but the effectiveness of the system is perpetually hamstrung by greed (2nd form).

In short, Gekko was wrong. Greed is NOT good.

Where do we go from here?

We may or may not sympathize with home-owners who have been foreclosed as they did take their chances and hopefully understood the conditions of their loan contracts, but we all agree the burden of this catastrophe (if that’s what it is) should not be borne by Main Street.

To quote Michael Josephson, “If you have an unregulated arena, cheaters win”.
That isn’t to suggest that the answer is more regulation, but perhaps better regulation - simpler and more transparent regulation.

The legal system in the United States is by far the most complex in the world and each year it only grows larger and more convoluted, especially in economic policy and tax legislation. This ensures that fewer and fewer people are capable of understanding and vetting proposed legislation before it goes into effect.
Our uneducated congressmen, let alone our citizens, have almost no chance of catching bad legislation in time to prevent the inevitable exploitation by those who have the resources and foreknowledge to take advantage of the changes.

Then we have the Federal Reserve, the hidden power-players who are accountable to no one.

We all realize the game is fixed, but we still play because no one truly believes that systemic change is possible and we figure, “Hey, at least we know the rules well enough to gain some ground this year.”

I daresay if you go back to one year ago we, as a nation, had less faith in the American Dream than anytime since the war in Viet-nam so it came as no surprise when last years’ presidential election boiled down to one word. Change. The same rhetoric that is guaranteed to work at least once per generation. In pessimistic times change is a surefire bet and Obama was a shoe-in. We, as a populace, suffer from the battered citizens’ syndrome, telling ourselves that “this time will be different.” Why? Because we need to believe again.

Don’t get me wrong, I am an Obama man. I’m not sure if we ever had a candidate that exuded so many of the qualities we all look for in a leader: intellect, empathy, composure, integrity, and even moderation in divisive times. Also, not enough can be said about boons that come with being in the right place at the right time.

It’s way too early to pass any judgement, but the pledges to introduce more transparency to the legislative process are inspiring. Sure, the bailout is more of the same, but it was on the table even before the election and it’s just too early in his term as president to try anything too radical. The jury is still out and will be for some time, but I truly think there is a sense of optimism in the minds of the people these days, despite the continual doom n’ gloom overtones. Obama is still managing expectations in anticipation of more bad news. You can’t start selling optimism if things are about to get worse. The one thing I think we can all agree on is that these are some interesting times in which we are living.

Risk Management is not only a very important and often neglected part in trading but also in other aspects of life

Great stuff. Thanks,

Markus