Markets run on trust. Trust that contracts will be honored, trust that a company’s financials are reasonably accurate, and trust that the government will maintain accountability and a level playing field. Take that trust away and the lifeblood of the economy will drain out in an instant. I will not invest in such a climate; I’ll take cold hard cash and short the market all the way down.

It didn’t have to be this way.

Quite frankly, if more investors and politicians had listened to Gary Shilling’s pronouncements on the housing industry, Nouriel Roubini’s dire analysis of the world’s credit system, Pershing Square’s William Ackman’s comprehensive admonition of the monoline insurers or, even back in time, Kynikos’ Jim Chanos’ keen analysis of the shady accounting at Enron, billions of dollars in losses could have been avoided, and public policy solutions to systemic problems would have been encouraged before it was too late.

– Doug Kass, 2008.02.15