I’m going to post my letter to the NYTimes editors in response to their editorial on financial institutions “betting against” their clients. Let’s see whether they publish my, or any other, dissenting opinion.

http://www.nytimes.com/2009/12/29/opinion/29tue2.html

To the Editors:

I must take umbrage at your recent editorial commenting on financial institutions’ practice of “betting against one’s clients.” The language itself is inflammatory and much along the lines of the style of slanted commentary used by Fox News. Banks, traders, etc. are not really betting against their clients. They are merely taking a different position, as they should be free to do, no different than my buying a stock – when some other person or institution makes a “bet” that I am wrong in my estimation that that stock will increase in price. There is no inherent problem with someone coming to an opposite conclusion than me regarding a stock’s value. Why should it be any different with other financial products? If they are truly too complicated to properly value, no one should buy them. We must also keep in mind that we are not talking about boiler room types selling bad investments to grandma. We are talking about (what should be) intelligent and informed financial professionals. There is an old concept known as caveat emptor that seems to be purposely overlooked here. Could the banks have had better information than the investors, their clients? Of course. Should the investors have been well aware of that and informed their decisions accordingly? Again, yes. Although P.T. Barnum may not ever have uttered the phrase there is a “sucker born every minute,” the trick is still not to be one of them. The investment professionals who purchased these products were paid handsomely to avoid being that sucker. We surely need financial reforms, but please let’s not confuse the issue by placing too much blame on the salesman, who is really just doing his job.