Quote Originally Posted by GGT View Post
1) Its one way that fraud can hide in complexity (with speed), yes. SEC has basically admitted that

2) No, you can't just jump into the hog futures market as an individual. And I don't care what stocks you buy, whether you use a big brokerage firm or e-trade. That's not the suggestion of two distinct markets that (in theory, and it wasn't my idea) keep retail investors and pension funds separate from hedge funds or synthetics. Rather like how the mercantile exchange was separate from NYSE. There's also a suggestion for a new exchange where OTC derivatives would be traded and regulated, not in private in dark.

3) No--the 50b "insurance fund" is a bad idea IMO. Some say there should be a limit to how big they can grow (100b or 2% of GDP), not sure how that'd work. But it's crazy to have financial services be over 40% of GDP growth, or 5-6 banks holding half of all mortgages and 2/3 of credit cards.
1) The whole point is that Madoff wasn't really trading anything at all. And he used antiquated systems to print statements that couldn't be plugged-in/tracked to said fast computerized trading systems.

2) You really can't somehow decouple some equity/commodity markets from others just by legally making it so. People need to grow up and realize that investing (and economic growth) has downside risk that happens sometimes.

3) I think financial services are maybe 12% of our economy by revenue. The UK is where it's something like 40%. But here is where you and I aren't seeing eye to eye —*I also agree that imbalanced economies are bad. And you've heard me complain about stupid people in finance making tons of money before.

But the solution is for us to stop creating byzantine new taxes, regulations and other barriers to successful economic growth. We know that financiers are always going to ride on the margins between the Fed funds rate and prevailing interest rates. So we need to stop making the rest of the economy so uncompetitive.