Tuesday, July 19, 2011

Making a market

I've seem some calls for investigation/lynching/etc of various trading shops/investment banks for their evil deeds. Here's one example:

Investigators discovered that Goldman traders bragged about selling "shitty" deals to clients and the mega-bank bet against the same financial products it was selling to investors. And they've lied about it all the way to the bank.

Yes, usually when you sell something to your clients, you're selling it. That's sort of the nature of selling things, unless I'm missing something. If I call up my stock broker and buy 100 shares of Microsoft, he may very well sell me those 100 shares, betting against me. And I'm betting against him. Am I missing something?

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