After reading Professor Gruver’s article I sort of didn’t know how to react! I really resonated with the idea of “other peoples money” and how this should foster more sense of responsibility among Wall Street when dealing with investments. There always should be care taken with investments made on behalf of other people, and it shocked me that sometimes there really was not as much care taken as should have been.
Something I thought that was really interesting was the initial Goldman Sachs Trading Company, and the level of complexity that this instrument of trading had. They expected normal people to understand what they were buying if it was a “highly complex, layered, highly leveraged instrument”. There are probably some finance majors who couldn’t completely understand the facets of this instrument, yet they opened these options to the public to buy?
This is a huge problem that is especially relevant today. With all the derivative instruments that are out on the market and the opaque-ness about how these instruments are created, what can an interested customer trust to purchase? And once they purchase something, can they trust the company they invest in to actually make responsible choices regarding what other options they choose to make available to the market?