5 ms·
There are N^2 sets of rules. At the end of the day you have two counterparties engaged in voluntary exchange. Everything is negotiable, anything is possible --
by dnomad 9y ago
There are N^2 sets of rules. At the end of the day you have two counterparties engaged in voluntary exchange. Everything is negotiable, anything is possible -- you just have to ask or pay. What people don't seem to grasp about modern finance is how mind boggingly complex and dynamic it really is. The idea that a tier one investment bank and a small trader should be held to the same "rules" is so wondrously silly... it's hard to describe but there ought to be a word for it.
The only thing really annoying here is that all this wackiness is backstopped by the Federal government. Nobody has any doubt that at the end of the day they will step in to save GS if everything really goes sideways. And that's probably a good thing. But it's very strange that the big banks, which are essentially quasi-state actors at this point, get to keep so much of their profits when the public is bearing so much of the risk.
This is the real difference between China and America: in China the government does everything in its power to make sure its state-owned enterprises succeed and then it takes its pound of flesh. In America the government does everything in its power to make sure its state-owned enterprises succeed and then it gives them a huge tax cut to make the shareholders that much richer. It's a bold move, let's see how it plays out.
- matte_black 9y ago> it's hard to describe but there ought to be a word for it. The word is naive.
- chibg10 9y agoThe Chinese government bailed out Anbang literally two days ago. https://www.ft.com/content/c5bca040-37c6-11e8-8b98-2f31af407cc8 https://www.ft.com/content/c5bca040-37c6-11e8-8b98-2f31af407...
- bartart 9y agoAt least the chairman is on trial. Not that the trial would be fair or is for the right reasons.
- feiofh398r39rty 9y ago>The idea that a tier one investment bank and a small trader should be held to the same "rules" is so wondrously silly... it's hard to describe but there ought to be a word for it. Just like the idea that the aristocracy should be accountable to the same laws as commoners, right?
- dx034 9y agoNo but if GS asks a counterparty (with whom they have billions in other contracts) to cancel contracts as a result of a system error, the counterparty will probably agree (if they don't lose as a result) knowing that GS will next time do the same. With a small party, this could just be an attempt to undo a bad deal. I think what the poster meant is that deals are just contracts and can be amended if both parties agree. For large banks with longstanding relationships, that is naturally much easier than for a trader that no one knows.
- 9nWvAVb5 9y agoIn its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets, and steal loaves of bread.