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| quote: | Originally posted by Capitalizt
Derivatives have only become the disaster they are because these major institutions have an implicit guarantee from the government that they will never be allowed to go under. I think a few catastrophes with no corresponding bailout will do a world of good for the markets in the long run. This attitude that things must be kept on an upward trajectory at any cost is where the real damage is done krypt. All of these stimulus plans, home buyer tax credits, cash for clunkers, etc are distorting the market prolonging the current malaise. This belief that the state must fight market corrections and keep this bubble economy inflated at all costs is the SOURCE of the debt you are so worried about. |
The derivatives market is the wild west of the financial world. The size of this market is in the 100's of TRILLIONS of dollars. You're saying that a market with the potential to totally destroy our economy single-handedly, and almost did in 2008, should be left alone. No oversight, no capital restrictions, no separation of commercial and investment banking, etc. And when it does inevitably threaten to bring down the entire system, the government should do nothing and watch as society verges on a meltdown. I don't buy it for one second.
"In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." -Warran Buffet
Warren Buffet on Derivatives
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