I had to do a double take as I was listening to the comments of a high-profile securities lawyer who said, "Yes, of course. We must absolutely have stricter regulations for Canada's brokers because of - you know - the Financial Crisis..."
Wait a second. Let's rewind the tape.
First of all, the U.S. Financial Crisis had nothing to do with stocks or Canadian financial advisers in particular. It was a real-estate/sub-prime crash in the U.S. not in Canada.
The stock market was a victim, not the cause of the U.S. Financial Crisis. When a mortgage is way higher than the value of the house, really bad things start to happen. Please re-read "The Big Short", "Bailout Nation" or other books about the causes of the Crisis. We will have a test afterwards.
Even though I am an optimist by nature, personally, I do not think there is a cure for persons affected by financial amnesia or cognitive dissonance. However, financial amnesia and cognitive dissonance disorder (CDD) have remarkably many of the same symptoms.
Although the clinical psychological definition of "cognitive dissonance" is often expressed as "the feeling of discomfort that results from holding two conflicting beliefs", the term has acquired a different meaning. It generally refers to a person that has seen, observed or been given irrefutable proof of something yet refuses to change one's beliefs by rationalizing away the proof submitted.
Example of cognitive dissonance:
A person believes that cannon balls float.
Even though the person participates in an experiment (by dropping a heavy cannon ball in a pail of water - which promptly sinks), the cognitive dissonant person will insist that cannon balls do float and that the experiment is somehow rigged or defective. Please note that cognitive dissonance is not a function of a person's IQ. People who think they are really smart are often victims of CDD. Curiously, victims of CDD will almost always vehemently deny they have the disease. They can still function in society (to a degree) and can often obtain gainful employment in politics, media, the legal field or public relations.
I am sure that everyone has met or known of at least one cognitive dissonant. Please join me and start a movement to stamp out cognitive dissonance before it runs rampant. Hopefully, we are not too late!