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They created something known as synthetic CDOs that didn't even contain mortgages but merely referenced them, exchanging cash between two parties taking opposing bets that a mortgage lender unconnected to them would get its money back.
That's not investing. Financial services are an unnecessarily large part of our economy. Honestly, we have computers. It's not that difficult to move money around. It's such a joke when the 'it's too complicated' argument is made. It's not complicated. It's just math and laws. Building the LHC is complicated. Investment banking is not. Financial analysts cannot be more than zero-sum at prediction, because the markets correct for advantages. There is a massive sector that isn't too much more than betting mixed with some banking. A percentage of this regards investment in new and growing industry, but I think the majority of it is just looking for loopholes and placing bets.