"The full Gillian Tett interview
My full 18-minute interview with Gillian Tett for Reuters TV, talking about Gillian’s new book, is now up:
I definitely make a better blogger than TV presenter, but there’s some good stuff in here all the same, I think."
I’m still puzzled by the logic. We use investment X because it falls outside the range of laws about capital requirements. No one forced us to do this, although we will someday claim that incentives are akin to uncontrollable urges. So, X has less collateral, etc.
Now, unless I’m mistaken, the capital requirements have to do with risk. In fact, even X has a capital requirement, so it must accepted that this requirement has something to do with risk. Lower capital requirements are riskier. The higher requirements lessen risk.
But wait, if X has a lower capital rate than the other regulated investments, that must mean it’s safer. Musn’t it? That seems to be the logic here. It’s like investing with Penn and Teller. Please explain to me how riskier investments become less risky. That’s all that I’m asking.- Posted by Don the libertarian Democrat