The huge compression of the investment horizon towards an extreme short term bias continues to be a major barrier to real recovery. A methodology to develop a direct capital flow between investors and the real economy is now desperately needed. Reflexivity, or simply put, the fact that markets have de facto no self adjusting mechanisms, should now be a most powerful wake up call to build the foundation of new economic and financial approaches; to explore new frontiers to save a declining West.
This article was originally published by Roubini Global Economics.