Passing on the risk is a major difference between banks today and years ago. There is almost no risk of collapse due to a regional or local event. Even a local bank in New Orleans can weather that storm so to speak, because they didn’t hold the notes on all those homes. The “market” did. The risk was diversified and the bank remains intact. Brilliant is probably a good word for it. 😉
The Intelligent Investor
Bill Gates commented after reading the Intelligent Investor by Ben Graham – Buffet’s bible – “It’s a simple book about bonds and compound interest. Not complicated at all” Well, it’s not complicated along the lines that Texas Hold’em isn’t complicated.
 Buffet is a big proponent of indexing for the average investor. I know you want to do otherwise, but for most people, this is the proper solution to their market exposure.
Are the markets really free?
A very complicated issue here. On the one hand you have free markets and free people that should be able to do what they please with their money. On the other, they shouldn’t be allowed to manipulate anything, and without regulation, how can you be sure they aren’t. Are the markets really free if they are being manipulated by a handful of big players?
No easy answer here. Â Although, the benefits currently outweigh the risks and problems.
Hopefully, in the future we will have hedge fund like products that are regulated and open to the average investor. No reason why the big boys have all the fun.
Dr. Douglas Rice 