I don't think I said anything bad about Wall Street except that when they screw up it causes recessions.
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And I mean "don't know" literally - if some smart economist wants to tell me it's a lot, I'll consider believing them.
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So the standard defense of hedge funds etc. involves a discussion of price signals as conveying useful info across parts of the economy. 1/
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For example, consider a fund trading oil derivatives. Say they notice something that's going to cause Brazil to consume more oil next year
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The firm bids up oil price futures, causing oil companies to invest more in production and oil consumers to plan to reduce consumption. 3/
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That seems kinda useful. Theorists will tell you same applies to derivatives on currencies, interest rates, mortgage risk. At some point:

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I agree that seems potentially useful, but is there any reason to think the right amount of resources are being allocated there?
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EG I've heard hedge funds don't outperform the market even though the people who run them make lots of money.
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Also heard there are weird arbitrage opportunities via eg neutrino-based signals (see http://www.nature.com/news/physics-in-finance-trading-at-the-speed-of-light-1.16872 … ) You could get ...
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