** Policy's selfishness and thus reluctant response to demand for fixing problems are often the roots of troubles.
** Last week, we saw something much risker than selfish policy, the crazy politics.
If something bad happened, the blame should not be on financial tools and even not on people who used those tools.
For example, MBS and interest-only loans brought liquidity to the market before the sub-prime crisis 2007. The buyers of those tools only, a little too boldly, undertook their default risks. It is the regulator, the government and its Fed, and its supporters, the big commercial banks, to be behind 11-years' rocketing of US housing market before collapse.
It is the same for options. For example, the hedge fund sells put indirectly helping lower capital costs for the underlying company while undertaking its downturning risks. There is no way for the fund not to price all risks, including the selfish policy risks, in the put. However, when the politics goes extreme and crazy such as forcedly de-listing public foreign companies for no reasons, what they can do about it?
The main street needs more while both streets manage to create dreams for people to keep working, borrowing, and consuming and never stop.
** Policy's selfishness and thus reluctant response to demand for fixing problems are often the roots of troubles.
** Last week, we saw something much risker than selfish policy, the crazy politics.
If something bad happened, the blame should not be on financial tools and even not on people who used those tools.
For example, MBS and interest-only loans brought liquidity to the market before the sub-prime crisis 2007. The buyers of those tools only, a little too boldly, undertook their default risks. It is the regulator, the government and its Fed, and its supporters, the big commercial banks, to be behind 11-years' rocketing of US housing market before collapse.
It is the same for options. For example, the hedge fund sells put indirectly helping lower capital costs for the underlying company while undertaking its downturning risks. There is no way for the fund not to price all risks, including the selfish policy risks, in the put. However, when the politics goes extreme and crazy such as forcedly de-listing public foreign companies for no reasons, what they can do about it?
The main street needs more while both streets manage to create dreams for people to keep working, borrowing, and consuming and never stop.