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> At some point trading the loan securities and fishing future contracts starts paying more than humble fishing This analogy relies on the financiers being eit
by nstj 10y ago
> At some point trading the loan securities and fishing future contracts starts paying more than humble fishing
This analogy relies on the financiers being either good speculators and arbitrageurs of risk, or charging high fees, ie: they need to get their high "fish salary" from somewhere.
Point is that the two reasons the financiers are being well paid are either that they're good at their job (a good thing), or that they're bilking the fishermen out of their output (which relies on the fishermen being conned into paying for overpriced financial services).
- icefox 10y agoIf each fisherman is willing to pay some trivial amount say $3 each year for some service that they find significant value out of than they are happy. Finance seems to often behave like programming where they do it at scale. When there are 12.3 million fisherman you could argue that the fisherman are indeed being conned into paying for overpriced financial services. But then you get into a question of value. Perhaps it is actually worth $300/year to each fisherman for this service and that is where it started and was only driven down to $3 by competition (and yet still very profitable as it only actually costs say 30cents on average)