Isn't that an example of complexity that is being successfully coped with, thanks to the abstractions provided by the various industries and institutions that provide raw materials, processing, shipping, etc?
The fact that every man in the street doesn't understand the mechanisms of these product doesn't mean they can't be copped with. In fact the most benign parts of banking are most likely completely obscure to most people (payment systems).
I don't think the 2008 crisis was caused by complexity. Most actors on these structured credit markets understood well the products. It was rather caused by over leverage and complacency toward credit risk.
And it will happen again. Hopefully the banking system is much stronger now, and the legal mechanisms are in place to limit the cost of a failing bank to tax payers. But the excess of liquidity as a result of money printing has starved investors for yield, and I believe that they are investing in places where they would rather not, like in 2005. Then it was subprime and commercial real estate. Now most likely emerging markets.
For people wondering about complexity of financial products, and if individual banks and traders did or did not precisely understand the implications of what they were doing, i wholeheartedly recommend everyone read Dit kan niet waar zijn (This cannot be true) by Joris Luyendijk. He spent about a year doing “anthropology” in the London financial sector, and it's a fascinating, horrifying read. I'm not sure if that book has been translated into English yet, but otherwise his column at the Guardian makes for equally good reading [1].
I've been reading it as "Grokked," as in 'understood.'
Cause it aint "coped," as in "they could handle it."
Copped would be more like they got some of something on the sly, possibly through sleight of hand ( copped a feel. )
In this case, accidental understanding of a system?
