Comments on: Is financial innovation a good thing? https://www.isegoria.net/2022/04/is-financial-innovation-a-good-thing/ From the ancient Greek for equality in freedom of speech; an eclectic mix of thoughts, large and small Mon, 20 Apr 2026 16:05:08 +0000 hourly 1 http://wordpress.org/?v=3.6.1 By: Senexada https://www.isegoria.net/2022/04/is-financial-innovation-a-good-thing/comment-page-1/#comment-3524128 Senexada Wed, 06 Apr 2022 23:19:28 +0000 https://www.isegoria.net/?p=48828#comment-3524128 Essentially all non-recourse leverage operates this way. The profit-maximizing strategy is often to make the biggest number of high-variance, high-leverage, independent bets you can get away with. Keep the home runs and walk away from the losers. A rational strategy for hollow men.

I hadn’t previously considered it “regulatory arbitrage.” It might be an apt description, as regulations tend to increase de facto non-recourse leverage.

]]> By: Harry Jones https://www.isegoria.net/2022/04/is-financial-innovation-a-good-thing/comment-page-1/#comment-3524071 Harry Jones Wed, 06 Apr 2022 14:51:34 +0000 https://www.isegoria.net/?p=48828#comment-3524071 Systems exist to be gamed. The only real rule is what works and what you can get away with.

All complicated financial vehicles are shell games. Beware derivatives.

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