By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Kasz216 on 07 August 2011
Edit Thread
richardhutnik said:
Kasz216 said:


So in otherwords, you have no actual way to argue the point and are trying to bring in unrelated pyramid scams to try and conflate the arguement to support your point.

Again, the math failed because of a state of the market hereto thought impossible.

You instead are blaming the market, for not prepairing for something that just about everyone would of agreed was unniversally impossible before it happened....

rather then government for creating such an occurence.

That's not even blaming the market for lava insurance.

It's more like blaming the market for having over leveraged in the case of dragon attack.


Though if you want to blame the market for that sure, they could of not levereaged vs the hereto thought impossible thing, then we'd of never had the crash because the economy wouldn't of even been as good as it is now, so there would be nothing to correct against since derivatives are the only reason the global economy was able to drive so high in the firstplace, the derivatives market being worth more then the actual cash of the nations in the world.

You think it's bad when 1.5 trillion is in buisnesses unused?   How about when many more trillions don't even exist anymore or never did.

In a sane world where derivatives are used to minimize risk that occurs in the line of performing regular business, they are fine.  The problem is that derivatives, and excessive faith in them, plus quantitivate analysis, results in people taking far more risks than they normally would.  This, in turn, produces a culture where everyone is driven to take excess risks, and then when the unthinkable happens, then the you have a crash far larger than would occur before.  In the past, we had the savings and loan crisis, with housing, and it didn't take down the entire economy as this last one did.  

A reason why I don't blame the government completely and fully for the crisis, while I can fault them for a good chunk of it, is that blaming the government ends up being an excuse to justify individuals in t he market for taking too many risks, and presuming their are bulletproof, and screwing things up.  What one has to realize is the markets ARE risky and you can just magically make the risks go away.  I would also suggest that things be done to eliminate "too big to fail".  But hey, it is convenient to bring up loss of jobs whenever you want to get a bailout from government.  Too much big business will cry loss of jobs whenever they want their government pork.

In a "sane world" where derivatives are only used to minimize risk, the global economy wouldn't nearly be as big as it is now... currently.  Post recession.

I think you underestimate how much derivatives have ran and grown the world wide economy.