Never suggested positives offset the negatives. Never suggested people in the market don’t do damaging things. My point is Wall St is in many respects a closed community – the average joe does not buy CDSs, MBSs, unless you are misfortunate enough to hold a fund that does. The mass public in general has no understanding or influence over institutional deals and trades. I am however suggesting that in all this madness, someone is for certain making money, even when others are losing big time. And there is no dispute that there are 2 sides to a trade – a trade would be impossible if there was not a buyer and a seller. You cannot buy an option contract unless someone is willing to write it.
I think its interesting that so many people believe wealth is just simply lost. Where do you think the money goes? Is there a vacuum I’m unaware of that sucks dollars out of the world? All while someone is buying MSFT or CSCO, there is another person shorting it. So if the price of MSFT goes down, certainly the person betting long loses money, but the person who shorted it makes money. People trade CDSs, credit default swaps because there are 2 sides – someone is betting their will be no default, whilst another is betting there will be. Someone profits from that trade.
