Good thread Slip. Wouldn't it be nice if folks would only bet what they can afford to lose? Maybe if they felt they would actually have to pay for their own mistakes they'd be a bit more circumspect. Preventing 'too big to fail' is key. The complexities boggle my mind.
dj On Sat, Apr 24, 2010 at 12:58 AM, Slip Disc <[email protected]> wrote: > We know that some people have made fortunes but is there really any > social value to what seems to be just gambling. Have we really gained > anything as a society or has it caused more ruin? > > Almost a year ago US Treasury Secretary Tim Geithner wants to regulate > the derivative market. > > http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5321278/Geithner-seeking-to-bring-derivitives-market-under-regulation.html > > The wiki definition; > http://en.wikipedia.org/wiki/Derivative_%28finance%29 > > Criticisms of the Derivative Market > http://en.wikipedia.org/wiki/Derivative_%28finance%29#Criticisms > > Below that the benefits which are clearly outnumbered by the > criticisms > > > NPR discussion on the Diane Rehm show which you can listen to here: > http://thedianerehmshow.org/shows/2010-04-23/news-roundup-hour-1 > AUDIO: http://thedianerehmshow.org/audio-player?nid=12352 > > JeffreyC wrote: > > Diane, > > I am a dedicated listener and I love your show. However, today I was > very upset that none of your guests new anything about derivatives. > Their inability to describe how derivatives increase social welfare > demonstrates what little they know of finance and economics. More > upsetting is how they pretended to know and still commented, spreading > misconception and falsehoods. > > DERIVATIVES allow institutions to hedge against uncertainties, > effectively reducing risk and volatility in earnings and investment. > This is good for business as more predictable cash flows allow for > better planning and increased investment. This has a direct positive > effect on the welfare of an economy. Also, speculators are necessary > to ensure that all hedgers are able to place their hedges. The > speculator thus provides needed liquidity since all transactions need > two participants. > > THAT being said, the real topic is whether or not derivatives > transactions should only take place on a transparent exchange. > > PLEASE try to have someone trained in economics or finance on your > show when discussing matters of this type. Thank you. > > -- > You received this message because you are subscribed to the Google Groups > ""Minds Eye"" group. > To post to this group, send email to [email protected]. > To unsubscribe from this group, send email to > [email protected]<minds-eye%[email protected]> > . > For more options, visit this group at > http://groups.google.com/group/minds-eye?hl=en. > >
