To continue our conversation without getting sidetracked, I think there is real merit in looking at the strange financial instruments which comprise much of the market today.
Besides short selling (which took me days to understand) we have these bundled mortgage notes which are split up, weird combinations of stocks in strange mutual funds, and all sorts of things which look to me as nothing more than a fancy substitute for off-track betting.
Stocks I understand. Bank accounts I understand. A note based on betting whether a Chinese company will fail seems a little chancy to me. This is probably why I am not working on Wall Street.
“A note based on betting whether a Chinese company will fail seems a little chancy to me”
Yes! at the heart of this are the CDSs. They are institutionalized PMI. PMI is one of the worse concepts on the planet. Turning them into tradable instruments is why this is so hard to unwind.
In fact my father has often told me that some strict Christian groups (sects - do not like using the word for Christians but cannot think off cuff of an alternative) in fact do not allow there members to deal in stocks and shares because they see it as a form of gambling.