Re:Traders Profit as Power Grid Is Overworked
by jjoonathan on Sunday August 17, 2014 @01:05AM
(#8188619)
> If capitalism requires you to hire PhD's who specialize in detecting complex financial bets
It doesn't. That's the point. That's why the power company is selling these financial instruments, not buying them: so that somebody else does the hard thinking.
The price is the signal. You don't need a PhD to determine the message implied by the fact that energy traders are willing to give good odds (i.e. pay more than expected) to bet that your grid will fail in a certain locale on a certain date.
> the power company serve human beings
The power company not only dropped the ball but dropped the ball after someone told it in no uncertain terms that it would drop the ball in the time and place that it eventually did.
If they clean up their act they stand to make good money by selling similar securities.
> the financial traders represent the worst of everything about capitalism
Correct incentives are the best part of capitalism.
It doesn't. That's the point. That's why the power company is selling these financial instruments, not buying them: so that somebody else does the hard thinking.
The price is the signal. You don't need a PhD to determine the message implied by the fact that energy traders are willing to give good odds (i.e. pay more than expected) to bet that your grid will fail in a certain locale on a certain date.
> the power company serve human beings
The power company not only dropped the ball but dropped the ball after someone told it in no uncertain terms that it would drop the ball in the time and place that it eventually did.
If they clean up their act they stand to make good money by selling similar securities.
> the financial traders represent the worst of everything about capitalism
Correct incentives are the best part of capitalism.