The concept of a general equilibrium has no relevance to the real world (in other words, classical economics is an exercise in futility).

Germany will always do the minimum to preserve the euro. Doing the minimum, though, will perpetuate the situation where the debtor countries in Europe have to pay tremendous premiums to refinance their debt. The result will be a Europe in which Germany is seen as an imperial power that will not be loved and admired by the rest of Europe - but hated and resisted, because it will perceived as an oppressive power.

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.

There is always a divergence between our perception and what actually exists.

A lot of the evil in the world is actually not intentional. A lot of people in the financial system did a lot of damage without intending to.

You could adjust the punishment to fit the infraction. Even a small fine would be enough to bring an errant government to heel.

If I had to sum up my practical skills, I would use one word: survival. And operating a hedge fund utilized my training in survival to the fullest.