The securitisation of mortgages added a new dimension of systemic risk. Financial engineers claimed they were reducing risks through geographic diversification: in fact they were increasing them by creating an agency problem. The agents were more interested in maximising fee income than in protecting the interests of bondholders. That is the verity that was ignored by regulators and market participants alike.

Markets are imperfect. So you do need regulation, knowing that the regulators are also human.

In politics, manipulating reality can take presidence over finding reality.

However, you have to recognize that regulations will never be completely successful and they will always be full of holes. You must constantly be ready to fill new holes. Actually regulation should be kept to a minimum, but there has to be some cooperation between market participants and authorities - as was the case in the early postwar years. The Bank of England was a very successful regulator by cooperating with market participants. This cooperative spirit was broken by the market fundamentalists.

The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.

Mankind's ability to understand and control the forces of nature greatly exceeds our ability to govern ourselves

If we carry this line of argument to its logical conclusion, the meaning of life consists of the flaws in one's conceptions and what one does about them. Life can be seen as a fertile fallacy.