“Derivatives have permitted the unbundling of financial risks.”

I don’t think it’s possible for the Fed to end its easy-money policies in a trouble-free manner.

Any informed borrower is simply less vulnerable to fraud and abuse.

The free lunch has still to be invented.

Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.

The gut-feel of the 55-year old trader is more important than the mathematical elegance of the 25-year old genius.

Since I’ve become a central banker, I’ve learned to mumble with great incoherence.

I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.

History cannot be reduced to a set of statistics and probabilities.

Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.

The companies could hire the educated workers they need. And those workers would compete with high-income people, driving more income equality.

I have one other issue I’d like to throw on the table. I hesitate to do it, but let me tell you some of the issues that are involved here.

Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices.

There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth.

At the risk of some oversimplification, if the skill composition of our work force meshed fully with the needs of our increasingly complex capital-stock, wage-skill differentials would be stable.

And she always has so much fun doing it. We make a good team.

I’ve been in and out of Wall Street since 1949, and I’ve never seen the type of animosity between government and Wall Street. And I’m not sure where it comes from, but I suspect it’s got to do with a general schism in this society which is really becoming ever more destructive.

The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions…

Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.

What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so.

Vision, the hallmark of leadership, is less a derivative of spreadsheets and more a product of the mind called imagination.