mr ed- more arrests in new york - currency traders this time. with an extraordinary range and number of crimes. the current system is so fukking broke. i dont know if it was always so - probably. rotten to the core. i had a thought yesterday: 'wallstreet is dead' - im not sure if its really over - it sure has survived remarkably so far - s&l and ltcm and all the others - extraordinarily resilient. but at some point, its gotta become questionable about whether the incumbent financial system is unsave-able. i dont know what the new one will look like. but im pretty sure that one day, the sysytem will collapse under its on weight. at some point, the great unwashed will decide that they dont want to leave their retirement money in the hands of 'these people' any more - they'd rather do it themselves.

if the markets are 'accurate', then consumers will realise that they can do the same job as their fund managers, minus the management fees. in fact most managers dont even return the index averages. the problem with individuals taking over their retirement funds is that they are probably even worse than the managers given the behavioural finance implications. praps the issue turns on whether individually we are more comfortable with our own losses, or if we'd rather know that we were being systematically fleeced. (and of course the relative financial performance).

the rise of etrading gives a stunning amount of hitherto unavailable information about the behaviour of retail investors. i wish i had their database of their transactions. individuals will make a lot of trading mistakes - that much is certain. im pretty sure that the figures would show that schwab/etrade customers have performed significantly worse that the indices. the whole fund concept is a good idea to protect indivdual investors from themselves, except that human greed gets in the way. its hard to imagine a fund industry without regulations, but see my previous post about my thoughts about rules. all of a sudden u have a gazillion rules and not much effective protection.

if u get rid of all the rules, then u at least remove the perception of protection. surely that would make joschmo take his/her financial illiteracy a little more seriously, rather than leave their retirement unquestioningly (is that a word? if so, its definitely an ugly one) to a bunch of crooks. the regulation gives the false aura of protection. and more laws arent the solution - the cat/mouse game never stops. it hasnt worked forever, and it wont work now - every time legislators reach for the holy grail and try to close 'this one last loophole', they just seem to cause more problems.

its not dissimilar to the current thg drug thingy. every time u change the definitions or whatever, someone will find a way around it. why not just abolish the whole anti-doping infrastructure? if athletes wanna indulge, why not let them? its the closest thing we'd get to a 'fair' playing field. and the playing field would be explicitly a field of 'substance ab/use' if u wanna compete, this is what u have to do. we already know, even within the normal context of being an athlete, that u have to be careful about what u put into your body - whether its gatorade or steak or brocoli or woteva. why have a rule that sez u have to stop there? that line is artificial. epo is a classic example - a naturally occuring substance that we all have in varying degrees. who's to say whether someone's epo reading is invalid. we dont penalise basketballers for being tall. and we dont penalise those who say have elevated shoes in an effort to mimic that advantage (im not really talking literally here but the analogy is still valid at some levels)

my point is that the rule actually creates distortions, and even the existence of the rule points to the fact that people are willing to 'cheat' - why not let everyone cheat equally? if the goal is to be the fastest person on the planet, then how about we let people do whatever they want to achieve that goal. if they choose to make the tradeoff between that glory and the life expectancy issues, then why not let them do it out in the open? is it worse that we allow people to try to change their physiology, or that we pretend that theres a level playing field? isnt there a point where we'd rather protect the innocent from 'wasting' their life trying to outcompete people with an undisclosed advantage? if u cant win the war, dont fite.