Sound investment

[unixronin]

This article, which specifically discusses Goldman Sachs' defense of the charges against it, reveals what I consider to be a strong element of what's wrong with the financial markets of today:  It's considered OK to make bad investments, because you can always bet against them or find other ways of pushing the risk off onto someone else.

Wouldn't it be better to research potential investments more thoroughly and only invest in the ones that seem sound?

Of course, when you can't trust the bond ratings, how do you know?

Well, then perhaps it might be better to just stay away from financial derivatives altogether?

Comments

[rain-manpnw.livejournal.com]

I wonder ...

"... you can always bet against them ..."

By this I believe you are referring to short-selling, yes?

What if we just banned margin accounts entirely? Or allowed margins accounts for betting on the upside, but banned short-selling?

[unixronin.livejournal.com]

Short selling, credit default swaps, and I believe there's a couple of other instruments of this type too. (Though IANAIB, thank all that's good.)