Couple of posts ago I outlined problems with "Rocket Science"
Looney Dunes: Finance troubles yet again
Rocket Science fails when unplanned variables break the model.
That said, "Modern" Finance, and the markets it has generated have served a very useful purpose: the spreading and sharing of risk.
Futures, options and all of the various forms of derivitives have both broadened and deepened the capital markets.
The problems arise when players go too far in seeking the marginal dollar or few cents profit from the markets.
I suppose it's "human nature" to explore and take risks, and this is where the cleansing of the markets needs to occur from time to time.
Others learn from traders fatal errors and adjust the markets.
Mark Twain: "History doesn't repeat, but it rhymes..."
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