HuffPost on derivatives (and prediction markets)

One Response to HuffPost on derivatives (and prediction markets)

1. Jason Ruspini says:

   July 17, 2010 at 9:24 AM

   She got served:

   Jason Ruspini 8 hours ago (10:45 AM)
   You are cutting and pasting a bunch of talking points and contributing nothing to the question of why the economy’s underlying returns have been depressed relative to most of the 20th century. Your argument is also logically inconsistent. If derivatives growth is an *effect* of economic slowdown as you claim, then why would restricting it cause a return to 20th century-style returns? Sure, at the margin, some people will go into technology instead of finance, but if that is the core of your argument, it is weak.

   Governments have failed, and as in the case of banks with their “off balance sheet” debts, it was deferral of pricing, NOT ACTIVE TRADING, that was the culprit. At least banks failed to predict the future. Governments failed to predict the PAST! The demographic and longevity trends have been apparent since a least the 1950s. This is the relevant “ponzi scheme”, put in place by politicians always only worried about the next election. You are recommending “doubling down” on this scheme, and if you cannot explain why underlying rates of return are low, you are being irresponsible. Look, if one’s balance sheet is underwater, but you have good cash flow, maybe some deferral of pricing makes sense. But if you don’t have a clear idea where your cash flow is going to come from, you have no business telling anyone to ignore the balance sheet.

   http://www.huffingtonpost.com/social/Jason_Ruspini/how-brokers-became-bookie_b_643350_53903486.html

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