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It's amazing how our bloated financial industry doesn't even come close to its supposed goal of efficient capital and risk allocation, but it is instead a huge

by cultus 6y ago

It's amazing how our bloated financial industry doesn't even come close to its supposed goal of efficient capital and risk allocation, but it is instead a huge source of unnecessary risk through nonsense like this. However, it makes a few people a lot of money, which is all that matters.

1-6 6y ago
It's amazing how much power one man would wield.
badfrog 6y ago
> a huge source of unnecessary risk through nonsense like this What is the risk illustrated here? A trading firm losing a few million dollars isn't a big deal in terms of the overall global economy.
xwdv 6y ago
What would you have people do instead?
smabie 6y ago
If it's so inefficient, it should be pretty trivial to make superior risk-adjusted returns, no? The reality is that most markets are brutally efficient, as any trader would attest to. The notable exception (at least in my view) is VC. Also, I wouldn't consider the financial industry bloated, at least not any more than other industries. How would you like the industry to be structured?
- tempsy 6y ago
  There’s nothing efficient about the equities market right now.
  - deleted 6y ago
    [deleted]
  - mcrae 6y ago
    The brilliant thing about financial markets is that anyone can put their money where their mouth is. If you believe you've spotted some inefficiency, then put up some cash and enjoy your spoils.
- eximius 6y ago
  > If it's so inefficient, it should be pretty trivial to make superior risk-adjusted returns, no? With equal access to market opportunities, maybe.
Nasrudith 6y ago
That gets the definition of efficiency and risk completely wrong for thr context. It is the efficiency andnrisk of the /market/ not the outcome for any given participant who may do a stupid thing. Price differences in iron ore by location stabilizing from buying high, selling low, and stockpiling some to prepare for supply disruption and variable input is promoting efficiency. Preventing some idiot from getting drunk and buying $70 million worth of iron ore weighing many thousands of tons when he thought he was buying his wife a $70 iron has nothing to do with risk or efficiency.

by cultus 6y ago

1-6 6y ago

It's amazing how much power one man would wield.

badfrog 6y ago

> a huge source of unnecessary risk through nonsense like this What is the risk illustrated here? A trading firm losing a few million dollars isn't a big deal in terms of the overall global economy.

xwdv 6y ago

What would you have people do instead?

smabie 6y ago

If it's so inefficient, it should be pretty trivial to make superior risk-adjusted returns, no? The reality is that most markets are brutally efficient, as any trader would attest to. The notable exception (at least in my view) is VC. Also, I wouldn't consider the financial industry bloated, at least not any more than other industries. How would you like the industry to be structured?

tempsy 6y ago
There’s nothing efficient about the equities market right now.
- deleted 6y ago
  [deleted]
- mcrae 6y ago
  The brilliant thing about financial markets is that anyone can put their money where their mouth is. If you believe you've spotted some inefficiency, then put up some cash and enjoy your spoils.
eximius 6y ago
> If it's so inefficient, it should be pretty trivial to make superior risk-adjusted returns, no? With equal access to market opportunities, maybe.

Nasrudith 6y ago

That gets the definition of efficiency and risk completely wrong for thr context. It is the efficiency andnrisk of the /market/ not the outcome for any given participant who may do a stupid thing. Price differences in iron ore by location stabilizing from buying high, selling low, and stockpiling some to prepare for supply disruption and variable input is promoting efficiency. Preventing some idiot from getting drunk and buying $70 million worth of iron ore weighing many thousands of tons when he thought he was buying his wife a $70 iron has nothing to do with risk or efficiency.