Friday, January 02, 2009

Financial Oxymoron of the Year: The Envelope, Please

OK, it's that time again. (Or maybe it was that time a few days ago, but whatever.) Here comes Proxyland's second annual, and slightly renamed, Financial Oxymoron of the Year Award.

Whatever you might say about 2008 - and you've probably said it - this was a great year for oxymorons. Our 2007 co-winners - risk management and financial engineering - pulled a Brett Favre and returned to competition. As the subprime market unraveled early in the year, mortgage-backed securities looked like the oxymoron to beat. In September, Fannie and Freddie's implied guarantee edged ahead.

As the year wore on, analysts warned of an Oxymoron Bubble. Nearly every two-word phrase on the business page seemed to qualify. To wit:

financial services
financial system
market discipline
government oversight

business judgment
free market

Let's throw in Federal Reserve. And is it too soon to add modern civilization? OMG, I need to get a grip.

No way can I decide, so I'm just going to treat these cute oxymorons like a bunch of Wall Street traders at bonus time. In other words, everyone wins! But if you twist my arm to pick one, I'd probably go with market discipline, which a certain Mr. Greenspan once called "the first line of regulatory defense in protecting the safety and soundness of the banking system."

Oh, and Happy New Year --which is not, as of yet, an oxymoron.

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