tag:blogger.com,1999:blog-4411161795798360588.post8469991982871964139..comments2024-03-26T09:38:39.888+00:00Comments on Borthlas: Not all jobs are worth savingJohn Dixonhttp://www.blogger.com/profile/07447224248021209852noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-4411161795798360588.post-48802887586782307862011-10-12T17:12:05.693+01:002011-10-12T17:12:05.693+01:00Spirit,
I agree with the first part of your first...Spirit,<br /><br />I agree with the first part of your first comment - speaking up for derivatives trading is indeed akin to giving Judas a PR makeover. And I'm not convinced that you've been any more successful at the former than you would have been at the latter.<br /><br />The derivatives to whch you refer seem to be a selective subset of the whole field; there's a good deal more to the issue than merely the parcelling up of debt.<br /><br />You may well be right that derivatives trading freed up the market, and increased the apparent money supply, but to what extent was the apparent increase underpinned by a real increase, and to what extent was it ever sustainable over the longer term? I'd accept that this is not a straightforward question, but surely it eventually became apparent that this was a 'bubble', and that the lack of underpinning in the 'real' economy was a fatal flaw? And that's without even getting started on the way in which it effectively privatised the upside and socialised the downside...<br /><br />Growth in pensions value is certainly a desirable objective, but if that growth is neither real nor sustainable, it ends up causing difficulties in the longer term, rather than really increasing the value of people's pensions. Certainly, the bursting of the bubble has hit some hard, but rather than trying to reinflate the bubble, we need to udnerstand that believing that we can really get something for nothing is delusory.<br /><br />And that, ultimately, is the problem with the markets in complex instruments not directly underpinned by real assets; they appear to generate something for nothing in the short term. A sustainable economy needs to be anchored in the real world, where such magic is understood to be illusory.John Dixonhttps://www.blogger.com/profile/07447224248021209852noreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-46333059943148252482011-10-11T20:53:03.550+01:002011-10-11T20:53:03.550+01:00Sionnyn, You are quite correct there are no direct...Sionnyn, You are quite correct there are no direct trading ,but what I pointing to was the increase in money supply over heated stock markets , which gave excellent pension provisions for companies and individuals.Spirit of BMEnoreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-18859043339272926452011-10-11T18:59:49.944+01:002011-10-11T18:59:49.944+01:00BME - Pension funds do not trade in these instrume...BME - Pension funds do not trade in these instruments - in fact the mitigate against the stocks and sovereign debt that pension funds do invest in. Short trading especially - and some forms of derivatives actually have the effect of driving down the value of long term investments.Siônnynhttps://www.blogger.com/profile/00021974709953206048noreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-16036861896465077412011-10-11T16:33:48.289+01:002011-10-11T16:33:48.289+01:00Speaking up derivative trading is the same challen...Speaking up derivative trading is the same challenge as giving Judas Iscariot a PR make over, but here goes.<br />Clinton Administration gave very clear green signals that poor families should have their own properties, so subprime was born, banks and rating agencies committed the crime of giving them a low risk rating – I know all pretty crazy when you look back, but a good idea at the time and it made Bill a happy man.<br />The packaging and trading of these derivatives expanded the flow of money and reduced bank exposure to the risk and stock markets boomed and money supply increased.<br />Now, if you want this market instrument to end completely, including the bits that worked very well over many decades and make banking more restrictive, you should be more up front and state how much you want to see public and private pensions fall and how much you would see unemployment rise as a result of the reduction in money supply.Spirit of BMEnoreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-24047145452280489062011-10-10T21:51:05.070+01:002011-10-10T21:51:05.070+01:00Glyndo - the problem is these 'Assets' hav...Glyndo - the problem is these 'Assets' have no intrinsic value - that's why cash flows to Gold in times of crisis - it is deemed to have an intrisic value (though I am not sure why).<br /><br />The other think I forgot to mention is that derivatives are trades Over the Counter, so there is no exchange to exercise control - only and external regulator can do that.Siônnynhttps://www.blogger.com/profile/00021974709953206048noreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-76255073449194157512011-10-10T14:02:19.995+01:002011-10-10T14:02:19.995+01:00It's all a gamble and as my dad said, "yo...It's all a gamble and as my dad said, "you can't shuffle the horses" The problem is that they are gambling with our assets with no apparent risk to themselves. That's why it stinks. "Something must be done"Glyndonoreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-32031924460154878562011-10-10T13:17:26.272+01:002011-10-10T13:17:26.272+01:00Anon - the straight tradig of shares are not the p...Anon - the straight tradig of shares are not the problem - and a re in any case subject to stamp taxc (wich invalidates Osbone's argument that taxes have to be applied worldwide to work. The problem is with exotic derivatives (which have little or no actual economic value), naked short selling of sshares (where people ssell shareds they don't own in order to drive down the price, so that they can buy them at less than they sold them - this making a profit. That should just be outlawed. Also, Foreign exchange trading, where maxzive amounts of cash are moved tfom one currency to another thousands of times a day to attain a very small return each time. This is purley speculative, and has no function in servicing trade (or business as we now call it). A tax of %0.005 on those trades would wipe out a huge swathe of people who make a lot of money while adding no value to the economy. That can't be a bad thing, can it?Siônnynhttps://www.blogger.com/profile/00021974709953206048noreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-39889907238602248782011-10-10T11:56:13.010+01:002011-10-10T11:56:13.010+01:00On a slight tangent, when shares were sold off by ...On a slight tangent, when shares were sold off by the gov't e.g. Gas, those shares could not be traded for some months. So why can't all shares when traded on the stock market be treated similarly?Anonymousnoreply@blogger.com