Re: [Pen-l] Risk in financial "speculation"

[Shane Mage <shmage@xxxxxxxxxxxx>]

On Apr 12, 2009, at 3:17 PM, Jim Devine wrote:

c b wrote:

I still have a problem with the basic way in which risk is discussed

in relation to financial speculation. In terms of their combined

probabilities, if we take the speculation of all the bigtime financial

speculators, they would not make big net gains if there was a greater

chance of loss than gain.  

Speculation, like any form of gambling in which the odds are the same for both parties, is a zero-sum game.  What one gambler wins, the other loses

So, most of the "speculation" must not be

_risking_ money, but rather putting it on a "sure thing". Well, up

until the latest big losses.

Making the  "net gains" zero,  except---

what's important is the
rustling up of fees and the like, along with the potential gains from
embezzlement and other Madoff-type activities.

So, as in every form of commercial gambling, the net winner is always the "house"--in this case, the brokers and embezzlers.

Shane Mage

This cosmos did none of gods or men make, but it

always was and is and shall be: an everlasting fire,

kindling in measures and going out in measures."

Herakleitos of Ephesos

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