Quote:
Originally Posted by Cowperson
If the best and brightest can explode themselves in the $650 TRILLION derivatives industry, then it can happen to anyone. And $2 billion here or there isn't difficult to make or lose if you're leveraging with OPM (other peoples' money).
You saw how vague the very blurry line between legitimate hedging and speculating really is in this particular situation. Where does one side start and the other one end?
I'm off and on with the very, very left leaning Paul Krugman, nobel prize winning economist and New York Times commentator, but I do agree with him today on "Why We Regulate."
http://www.nytimes.com/2012/05/14/op...e.html?_r=1&hp
You just can't have financial institutions using depositor's money in speculative leverage in an unregulated industry. That's the minimum price financial instutions have to pay to exist.
Cowperson |
Aren't people in OTC derivatives markets BECAUSE they are unregulated? IIRC International Bank for Settlements released data that the total OTC derivatives volume dropped (globally), some claim it is because EU/US want to put strict regulations on it.