Commentary: Markets move with impatience and greed

I’m not economist, but I have always believed our capitalist market is self correcting. I believe when we, as a whole, get too greedy, the markets cools down. When the market wants us to make more money, they grow. And I have always believed there has been a moral attachment to the free market. When greed replaces morals we are in trouble.

Paul Johnson writes in Forbes:

Markets are determined by moral strengths and weaknesses, and it is useful to identify what those are at each major episode. The state of the present market is the consequence of undue impatience combined with excessive greed.

He goes on:

Impatience led many thousands of ordinary people to seek to acquire properties of much higher value than their savings justified. They thus sought to borrow collectively immense sums that they could not hope to repay for many years–and, in some cases, ever. As a rule, this would not be a problem; banks and other loan agencies should simply have turned down such borrowers. The borrowers would then have had to contain their impatience until their savings accumulated to a level at which they could borrow prudently.

Unfortunately, impatience coincided with excessive greed on the part of a number of bankers. Many of the world’s top bankers lead highly competitive, high-spending lifestyles and are tempted to increase turnover–thus increasing their salaries and bonuses–through generous lending. The consequences of this behavior could be catastrophic.

How is that for an honest assessment?