Reddit mentions of Traders, Guns & Money: Knowns and unknowns in the dazzling world of derivatives

Excellent question. I get it. So do these people. And these. And these. And these. And this guy. And this guy. And him. And a bunch of others.

I had the benefit of working on Wall St. for a few years and saw the kind of people running the financial system. The computer scientists were for the most part typical idealistic and/or pragmatic computer scientists. But many of the finance guys were reckless greedy assholes looking to make money by tricking other people out of it, rather than by making or contributing anything of value. For anyone curious, Satyajit Das's book Traders, Guns, and Money provides a good description of who we're bailing out, and why. They're laughing all the way to the bank.

> "Would you agree that 1 thing out of the 23489178 outlandish things the commentator said is true?" Well, maybe, but his credibility is shot already at that point. I won't trust any of his stats after that.

Fine, and that's your perogative to do so. Would you agree though that by doing that you're completely ignoring the legitimate argument that still exists? And that it's not any less true just because you don't want to acknowledge it? I don't think it's very constructive to learning to stop listening to someone's point on Subject A, just because you know they've said something wrong on Subject B. By that reasoning, you would only listen to someone whose never made a mistake in their reasoning.

> I didn't mean to imply that derivatives are always bad, but there are many types that simply exist to evade taxes and trick lenders into thinking you're a less risky investment than you are.

Agreed. My only point though was that to the extent you think such tools are a "sneaky way to make more money", then it actually further helps the argument that taxing the rich is a completely non-viable solution to the depth of America's financial problem.

> Forgotten subprime mortgages and credit swaps already?

Lol, no. My friend, I actually have an incredibly deep understanding of our world's current monetary system and am aware of many of those financial products. This will sound arrogant but there is a tremendous irony on how much the common man in America looks at those tools and thinks, "ZOMG, I can't believe they create such silly products in the first place". The reality is that these tools are required in order to perpetuate our current monetary system and to allow us to keep issuing more and more debt. We could get rid of the tools, just we'd have to get rid of the monetary system then. My position is that we should do that, although that is not what the common man wants. I'd argue the common man's position is that he says he doesn't want those sort of derivative products, but his actions all support a system that require them to exists... he's a hypocrit but doesn't realize it.

> If you're unfamiliar with the blatant theft that goes on (like 'fixed income' contracts where all the terms cancel out to make 0 -- I'm not kidding) I'd suggest reading Trader's Guns and Money, written by well known derivatives expert Satyajit Das: http://www.amazon.com/Traders-Guns-Money-unknowns-derivatives/dp/0273704745

Again, I'm very cognisant of these tools and what they're capable of... I'm even on the level of understanding why they're being created. Could you boil down that guy's conclusion into something short and sweet for me to analyze? If it's not possible then no worries.

Cheers.

> If nothing else, would you agree that "taxing the rich" is not at all anywhere close to a viable solution to the depth of America's financial predicament?

"Would you agree that 1 thing out of the 23489178 outlandish things the commentator said is true?" Well, maybe, but his credibility is shot already at that point. I won't trust any of his stats after that.

> By the way, those accounting trick's your talking about help by allowing the company to make more profit off the same capital ratios.

I didn't mean to imply that derivatives are always bad, but there are many types that simply exist to evade taxes and trick lenders into thinking you're a less risky investment than you are. Forgotten subprime mortgages and credit swaps already? If you're unfamiliar with the blatant theft that goes on (like 'fixed income' contracts where all the terms cancel out to make 0 -- I'm not kidding) I'd suggest reading Trader's Guns and Money, written by well known derivatives expert Satyajit Das: http://www.amazon.com/Traders-Guns-Money-unknowns-derivatives/dp/0273704745

Edit, one important and relevant point from the book: It doesn't help make them make more profit. It helps them take what someone tells them is a lower amount of risk according to a complex model that is usually wrong and really results in greater risk.

Traders, Guns and Money by Satyajit Das (Amazon link) is filled with examples, though mostly based around derivs.

http://www.amazon.com/Traders-Guns-Money-unknowns-derivatives/dp/0273704745/