Read this right now.

[kurtmrufa]

This is as good an analysis of what is really going on in the financial sector - what transactions really mean - as I have ever seen.

Pull quote:

If you don't start thinking about finance in this way--don't start by classifying those who trade into savers, borrowers, risk-bearers, risk-shedders, principals, agents, gamblers, and marks--you do not

Comments

[otterdoc]

The gamblers and marks set my hair on end for a variety of reasons. I do wonder, after reading this, just how someone who knows he doesn't know sh*t about this sort of thing ought to go about navigating the transactions without feeling massive butthurt.

-M.

[kurtmrufa]

It's more or less to make sure of what you're buying, and in turn what people who are investing on your behalf (which can happen in various sneaky ways) are buying.

With respect to personal finance, it amounts to never accepting a loan you do not completely understand and when it comes to investing, to avoid trading and avoid investments (such as actively managed mutual funds) where someone is trading on your behalf and charging you for doing so.

Politically speaking, one should support people who are prone to putting bankers in jail when they break the law and also a transaction tax. If there was a 0.1%-of-value tax on all share trades, it would not hurt the average person investing for retirement in a mutual fund in any way but it would stop all the wall street speculative bullshit dead in its tracks. Even if it were 0.01% it would...