Letters to the Editor
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Risk Laundering
The proliferation of a vast array of complex financial instruments that are sliced and diced and recombined in a bewildering variety of forms and bought and sold and traded by thousands of parties across the globe...
My wife used the term "risk laundering" when we were discussing these instruments about a year ago. Like money laundering, risk laundering ought to be illegal. The whole idea of the marketplace is that an investor can assess risk versus value, reaping the rewards of making a good decision, and paying the price for making a bad one. But by obscuring the risks this fundamental working of the marketplace is disrupted, and what we are left with is what Noam Chomsky describes as socialized risk, privatized profits.