Sunday, May 20, 2012

Ready, Fire, Oops Again

There is a reason that we put sights on a rifle; it’s done so that we can fire the rifle with some hope of hitting something useful. Journalists and politicians pick up their rifles, cock and lock them, and then blaze away without even knowing what a furshlugginer gunsight is, let alone thinking to use it before firing.

JP Morgan Chase lost $2 billion on derivatives, now up to $4 billion, and everyone is fulminating about how they bought too many derivatives, or used the wrong money on them, or whatever.

No one acknowledges that the fundamental problem is not how derivatives are traded, who trades them, in what volume they are traded, or whose money is used to trade them, but the derivatives themselves. These instruments are frauds. They are promises of payment that are not backed by the ability to pay. Buying them in any quantity is stupid, selling them is fraudulent. They should not be regulated, they should be outlawed, and anyone selling them should be put in prison.

JP Morgan Chase is guilty of nothing other than stupidity, which is not a crime in this country. In fact, it usually gets you elected to high office. The people we should be pointing our rifles at are the criminals who sold to JP Morgan Chase the instruments which caused the financial loss.

The correct order of events is, “Ready, Aim, Fire.”

1 comment:

bruce said...

Aim it at the politicians that allowed this sort of thing, and did not regulate it or re-regulate it or ban it.

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