Any system that is deprived of its natural volatility, with government up (unintelligible) volatile, any system becomes very fragile.
Is the economy something organic or is it something engineered? I think it's closer to the organic. You harm it by artificially suppressing volatility in it.
Poetry does need a bit of ferocity. The only way to attend to the fractured world is to write a ferocious kind of music, to sing that volatility.
Political life loves some volatility.
We regard using [a stock's] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns - for example, See's [a candy company owned by Berkshire] usually loses money in two quarters of each year - and some terrible businesses can have steady results.
Switzerland is the perfect place where you have volatility at a municipal level that nothing up top - small units competing with each other.
Berkshire's whole record has been achieved without paying one ounce of attention to the efficient market theory in its hard form. And not one ounce of attention to the descendants of that idea, which came out of academic economics and went into corporate finance and morphed into such obscenities as the capital asset pricing model, which we also paid no attention to. I think you'd have to believe in the tooth fairy to believe that you could easily outperform the market by seven-percentage points per annum just by investing in high volatility stocks.
Who would you trust right now? Which bank would you trust? Which investment would you trust? Do you really want to put your money; do you want to suffer more of these losses that we just had? You know, these volatility that we see is just unexplainable by any rational standards. Nobody has any clue about how to explain this, and nobody wants to experience that. So, we hold more money back, we don't necessarily want to invest in the market and by default, people are saving more.
In economics, when you put together a highly elastic thing and a highly inelastic thing, you create extraordinary potential for turbulence, volatility, and for unstable prices.
We've seen the volatility at dollar-yen, U.S. Treasurys, JGBs (Japanese government bonds), German bunds.
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