That seems too naive. We all know that Wall Street are full of crooks and are colluding with the government. Any of the directors involved in the mortgage bust served any jail time?
Selling insurance against massive fluctuations would be a sustainable business. You would solve the problem you created and profit both ways.
If there's a high chance of you going to jail each time you do it, that makes it non-sustainable.
Re:Computer Trading Is Eyed
by barkingcat on Saturday May 08, 2010 @01:05PM
(#1330490)
What if there is a close to zero chance of you going to jail everytime you do it? When the government and the banks are in collusion, that's what you get.
We're talking about the stock market blip from this week. If you can demonstrate that this happened due to collusion between government and banks, please do.
Let me repeat brisance's question:
Any of the directors involved in the mortgage bust served any jail time?
Brisance's question wasn't relevant to what I'd said, or this thread, and that's why I didn't respond.
How is his question not relevant?
You claim that there is a significant risk of going to jail for "Selling insurance against massive fluctuations".
That's a bit strange because these insurances (CDS) have been sold on a massive scale over the past years and are considered to be one of the main reasons for the crash. I did not hear about anyone going to jail for it, or did I just miss that part?
No, my claim was that the following would put you in jail: (1) shorting markets and then (2) deliberately creating the sort of fluctuation we saw in the last week.
That's all I was commenting on in this thread.
(Selling "insurance" and it was wrongly labelled above wouldn't be profitable even if there weren't jail problems. The sell side loses money on a CDS when the market goes down. You'd want to buy CDSs for that eventuality, and CDSs are not insurance.)
The guys at the SEC are not stupid. If the regulators had an idea that you were doing this they'd first try to find the evidence and jail you. And if they that doesn't work, they can just sit on you until they find something else - even if it's something they've dug up in an unrelated business unit in your group.