@mattbrowne Curious to blame CDOs and futures markets for recent financial news. lets just take the latter. Are you insinuating that there was no real problem in Greece? That it didn’t have a huge amount of debt outstanding that it couldn’t service and was currently running a deficit? Everything was just rosy until some people decided to bring Greece down?
Trading ensures that assets are assets are priced accurately. There was little chance of Greece paying its debts, so why shouldn’t buyers ask for a bigger cut for assuming these risks.
Citing the Tobin Tax as if you are economically literate is laughable when compared to your obliviousness to market mechanisms, especially manipulation. Because you would know that the more people try to manipulate a market,the more robust the prices become. See a theory paper here, and an experimental paper here.
Greece ruined itself by pretending it was richer than it was. They spent more money than they had or could expect to pay back. Would you want to lend money to them?
And not only was the Tobin Tax proposed in the 70s, but was already used before and during the great depression. No obvious effects were seen from this. If you were up on the literature, you would know about the efficacy of a Tobin Tax.
Golly gosh darn, why is it that there are so many armchair economists out there?