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Monday, November 30, 2009

Casino Capitalism

Maria Cantwell the junior Democratic senator from Washington, is calling for gambling laws to be applied to aspects of financial markets. In particular she is honing in on hedge funds.

McClatchy: Wall Street's a casino, so maybe state gambling laws apply
...someone needs to police financial markets where "casino capitalism" involving highly speculative trades she likens to sophisticated betting continue unabated and threaten to create yet another financial crisis.

...help rein in the nearly $600 trillion derivatives market.

Over the years, however, derivatives became more exotic, allowing investors to place what were essentially side bets on such things as whether people would default on their mortgages or whether the price of oil or natural gas would go up or down.

3 comments:

Glynn Kalara said...

Good way @ looking @ this issue. Hedge funds and many other so called newly manufactured financial products are nothing more then gambling wrapped in legalese to camouflage the fraud. Wall st. is an army of what in Yiddish are called shysters ( con men). This has replaced commerce because we have nothing to sell anymore.

Jim Sande said...

The key is to be a player in a huge investment firm like Goldman, and then control the outcome. Its not a gamble if its a high to certain probability. We just read that Goldman sold bad mortgage debt knowing it would soon fail and they profited on the failure of these "products."

I do like the term.

Glynn Kalara said...

Shysters like I said. Wall st. is really no different then the guy with 3 cups and a pea. Winning is everything to these guys, everything else to them is just the sentimentality of losers.