Bucket Shops

March 16th, 2009 § 0 comments

theOwl

I really hope this stuff I’m dealing with here tonight – Derivatives – Bucket Shops – and their role in our still melting financial fiasco –  is not totally boring to you, my readers.  It just seems to me that regular non-economist people like you and I have got to start understanding what has happened to our system of money and exchange.  I’ve not yet formed a totally coherent gestalt, but the most powerful and explanatory metaphor I have run across so far is that of “Casino Capitalism”.

What we’re dealing with here appears to be a byproduct of legalized, totally unregulated gambling.  This kind of setup – unregulated gambling – has traditionally been of great interest to organized criminal elements, only now these criminal elements seem to have morphed into “financial institutions.”  Or perhaps it’s the other way around.

I have found a few worthy and clear sources of information.  First is this clip about Credit Default Swaps that ran on the CBS show 60 Minutes last fall:

Next is a  diary I found tonight at Daily Kos.  From the comment thread:

With each trade, each inflationary move, with each new slice and dice of the underlying instrument, they took out HUGE BONUSES.

Let me put that in straight english:

They get bonuses for making money. If they artificially make money, they make huge bonuses.

There it is in the nutshell.

There’s much I don’t know about this stuff.  Y’all don’t hesitate to set me straight if I’m missing something big here.  I may be.



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