Is the market a casino or one that assists the real economy.
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Submitted by Lyle (United States), Feb 16, 2010 08:54
To allow naked cds trading is to turn the market more into a casino than a market that is designed to assist the real economy. Not all contracts are legal, a contract to commit a crime would in the limit of free contracting be legal, but is not because society does not regard that kind of contract as legitimate. Its an interesting question of if the folks in Las Vegas would deal in a bet the equivalent of a naked cds, i.e. you go to your Vegas bookie and bet him that Greece will default, and what kind of odds would he give you. (Actually this might be a more fair deal than the market)
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