Fans of the TV cartoon South Park were treated to a comical scene this week that resonated with me. The episode raises an intriguing question: Can there be rational thought behind some of the decisions being made about the economy and financial institutions?
Stan (a normal kid from Colorado, for those of you who dont watch) sneaks into the U.S. Treasury offices. Hes wondering how Treasury officials make decisions about saving troubled institutions, and here is what he sees: One official chops the head off a chicken and throws the bird onto a giant horizontal wheel sectioned off in bright colors, with each section labeled as a potential option. Another official spins the wheel. A third takes out a kazoo and performs circus music while the bird lurches around crazily, spewing blood. When the headless bird finally expires, the space on which it falls lights up with a game show flourish of beeps and the decision is made: BAILOUT!
Im quite certain that Treasury officials have other tools at their disposal. (Ping pong ball lottery machines instead of chickens?) But the broader point is that there are so many unknowns right now that we might as well be using the chicken method. We simply dont know where this is all going.
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This blog has been reprinted with permission from Celent. Craig Weber is SVP of Celent's insurance group, and can be reached at cweber@celent.com