4 ms·
Yeah we should ban derivatives too.
by amelius 8mo ago
Yeah we should ban derivatives too.
- gos9 8mo agoWho’s “we”? You or I certainly don’t have a say in this
- gruez 8mo ago/s?
- JumpCrisscross 8mo agoDon’t think so. A lot of peoples’ first reaction to something they don’t understand is to try and make it go away.
- fragmede 8mo agoA lot of people reaction to understanding what derivatives are are also to try and make them go away. Thinking derivatives are legalized gambling, and being against gambling entirely, doesn't require a lack of understanding of derivatives to be against them.
- JumpCrisscross 8mo ago> thinking derivatives are legalized gambling, and being against gambling entirely, doesn't require a lack of understanding of derivatives to be against them No, but anyone who has an introductory knowledge of derivatives and their history will know of the Onion Futures Act, which banned "the trading of futures contracts on onions" to predictable (albeit long term) effects. Broadly speaking, the less someone knows about derivatives and the further their work is from the production of any good (versus services), the more likely they are to get upset about it. [1] https://en.wikipedia.org/wiki/Onion_Futures_Act#cite_note-fortune-19 https://en.wikipedia.org/wiki/Onion_Futures_Act#cite_note-fo...
- Zigurd 8mo agoI hope everyone reading this realizes that commodity futures are useful and easily distinguished from prediction markets, which are a ruse to get around restrictions on gambling.
- amelius 8mo agoThe world did fine before derivatives. In fact some might say it did even better. And gambling only makes the wealth gap worse. And there is a ton of nasty incentives linked to it.
- JumpCrisscross 8mo ago> world did fine before derivatives The Hittites and Bronze-Age Egyptians had forward-deliverable contracts that, if you squint, they would trade amongst each other. The idea of being able to assign a contract to a third party to which you're a beneficiary is about as old as civilisation. In part because it's obvious. In part because it's impossible to police. But mostly because it's useful. (I'm ignoring insurance and reinsurance, both of which are derivatives and rely heavily upon them.)
- amelius 8mo agoThe scale of things was much different back then. Not comparable.
- JumpCrisscross 8mo ago> scale of things was much different back then "Scale back derivatives" is a reasonable argument. "Ban derivatives" is silly. > Not comparable Totally comparable. I'm actually struggling to think of an infrastructure-building civilisation in history that didn't have some form of tradable forwards.
- nradov 8mo agoNonsense. Derivatives have been actively traded in the USA at least since 1848 (and even earlier in other countries). Nothing was better about the world in 1847.