Skip to comments.Derivatives – the new dimension of the reality
Posted on 05/11/2010 8:24:09 AM PDT by Big Bureaucracy
From Greece to Britain and the USA trillions in bailouts disappear into the black holes of the overspending government bureaucracies and irresponsible corporations. It is amazing that the stock markets are still functioning. May be it is because the Wall Street stopped reflecting the reality long time ago. Instead the market invented the new dimension of reality the derivatives of all kind.
Wall Street is trading crap the derivative markets are like trading shares for vacations on asteroids, because Obama said he has a plan to go there, when the economy recovers and he gets revenues from future cap-and-trade and sales taxes. What if the economy does not recover soon and new taxes are not imposed and we dont step on asteroid and there is no hotel there. You just dont understand, they say, it is about taking risk. We thought you go to Vegas to do that.
It is against the common sense Greece is sinking today like it was sinking yesterday (I dont mean global warming sinking, but economically collapsing), but the markets are happily jumping because the bailout is coming. Dont worry you just have to wait, it looks bad today, but it is a great deal in the future. Ah, the future-watchers-in-chief!
It is like parents telling a kid: Dont worry; everything will be alright! (the ultimate derivatives slogan), while maxing out their credit card because they hope their unemployment will be over soon. Only year later they still dont have income and they are losing the house.
(Excerpt) Read more at bigbureaucracy.com ...
Governments have created a new 'rationality' in the markets. Why fret over tomorrow's possible failures when you will be made whole today? Of course the financial players will react in what appears to be an irrational manner - because they are getting theirs, the taxpayers and the future be damned.
People that believe Wall Street is evil are empowering the current administration to do something about it, setting the stage for more government intervention, or more likely in the future, government takeover.
Markets work. Wall street follows the money. Get rid of government regulations and Wall street will follow consumers, not the government. It is that simple.
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