Comments on: Why privilege derivatives? Option ARMageddon Tue, 14 Oct 2014 13:06:34 +0000 hourly 1 By: al Sat, 23 Jan 2010 08:22:34 +0000 >>> derivatives are a pure gambling tool.

Wrong. Gambling is creation of new, artificial risks. It apparently doesn’t bother you when folks do that in Las Vegas, or in office football pools.

Derivatives are the instrument by which one party assumes someone else’s risk, in exchange for payment received. Fundamentally the same as health insurance or fire insurance.

No one was held at gunpoint and forced to sign papers with Goldman Sachs. They did these deals because they wanted high rates of return. Now they’ve lost their retirements because they were too greedy, and asleep at the wheel. GS wasn’t asleep at the wheel.

We can also note that even guys who ===were== outright dishonest, like Bernie Madoff, didn’t use advertising. They got their suckers by word of mouth from other “satisfied customers”, apparently mostly from within his own ethnic circle. Famous, prestigious people like Elie Weisel lost millions becuase they never did basic due-diligence. In 20-20 hindsight, we now now that those who did even rudimentary due-diligencing on Madoff, who telling anyone who would listen that this was a rotten fish.

If Eli Weisel had bought a used yugo, then complained afterwards that it isn’t “just like” the BMW as he was promised by the used-car salesman, you wouldn’t have much sympathy for him.

So why should we have sympathy for his financial losses which followed from his zombie-like devotion to a snake-oiler peddler?

The folks and the outfits who lost big bucks to Goldman Sachs, all had accountants and lawyers handy. If they weren’t too cheap to pay for a basic investigation of the risky paper they were lining up to buy, they wouldn’t have gotten hurt.

By: Lim Boon Chuan Mon, 26 Oct 2009 14:17:34 +0000 I think there is a need to revamp the entire banking system. The use and abuse of the systems by insiders to make money is crazy. The sub prime crisis is still hanging on our necks. We should start the revamp soon to make sure that those fat cats of the financial sectors slim down soon

By: Gaspard Thu, 08 Oct 2009 09:04:12 +0000 Where there is a winner, there is a loser, and if I recall correctly, some Chinese traders are not happy at all with the outcomes. Let’s restrict it to Goldman Sachs and CIT though – are you sure that they are preferential creditors ? Normally there is a whole queue, especially the IRS, before we move on to subordinated debts and the rest.’Increasing capital requirements and migrating trades to exchanges would be a good place to start.’ – good idea to get cash in, but are these not traded on exchanges, with its own rules already ?

By: Sergey Wed, 07 Oct 2009 17:59:09 +0000 Call me socialist but financial markets must be built around needs of real economy and society. I am fine with traders making excessive profit from their activities as long as it doesn’t affect the rest of us.For lost 2 yrs we saw spectacular abuse of society by financial sector. Financial sector doesn’t provide foundation for stable growth. On contrary it became tool of extortion that leaves the rest of economy straggling for survival.People who were in center of these events walk away with salaries and bonuses. I am talking about traders, executives, brokers and financial annalists. 1,000,000s people who had nothing to do with financial sector suffer badly – they lost jobs, saving, houses etc.America always pretended to be built about justice. Now we see that even justice is being hijacked and abused by greed. I survive after all I a work for finance :).

By: Bob Miller Wed, 07 Oct 2009 16:50:53 +0000 Yes it is another reason to shrink the derivatives market. The derivatives are a pure gambling tool. They need to be much more strictly regulated and severely limited. Most, of course, need to be not allowed for future investments.Money put into derivatives does not go into infrastructure orindustrial capacity, ipso factor, it’s a “bad thing” for the world economy and 99+ per cent of the world’s inhabitants.