Sunday, November 29, 2009

Insurance is Gambling, Too

Sen. Maria Cantwell wants to use state gambling laws to regulate parts of Wall Street, saying someone needs to police financial markets where "casino capitalism" involving highly speculative trades she likens to sophisticated betting continue unabated and threaten to create yet another financial crisis.


Derivatives essentially began as a form of insurance, offering a hedge for such companies as airlines that wanted to lock in the cost of jet fuel to avoid sharp increases. Over the years, however, derivatives became more exotic, allowing investors to place what were essentially side bets on such things as whether people would default on their mortgages or whether the price of oil or natural gas would go up or down.

Industry groups said Cantwell's bill goes too far.

(McClatchy) Yeah, there's a surprise. The system we're in, "Heads we win, tails you lose," needs to be stomped down hard. I'm at a point where if the financial and insurance industries say something is a bad idea, that in itself is a demonstration that it's a very good idea indeed.

So I'll float an idea: I think we should consider dropping a tent over Wall Street in the middle of an active work day, and fumigate it. Wipe out every insect infesting our nation's financial center.

Anyone think that's a bad idea?

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