Reallocating Human Capital

Wall Street has devoted enormous resources to exploiting minute market inefficiencies.  The explosion of hedge funds and other alternative asset classes has brought enormous leverage into these strategies.  It may well be that we have become “overspeculated” so that these trades don’t provide value to the markets commensurate to the resources expended.   Perhaps the biggest resource of all, human capital, could have been better used elsewhere in the economy.  One of the long term healthy outcomes from this painful market experience will be to steer more of the best and brightest into other areas of the economy.  But for those of us who have only known the paper-pushing world of Wall Street, the dislocation can be rough:

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