As I interpreted it, the attack was more on the economic rent extracted by the originators of the "zero sum" ABS and CDOs rather than the concepts themselves; the core thesis being that there would be a lot less profit to be extracted from originating opaque financial products if demand for them wasn't artificially inflated by buyers and sellers being insulated from the downside risk of their decisions.
It's more akin to saying you end up with too many startups getting too much funding in a climate where investors don't do adequate due diligence.
You won't find startups "innovating" in as brazenly cynical a manner as alleged in the Goldman Sachs example the author recounts either...startups don't profit from people shorting the stock they issue.
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As I interpreted it, the attack was more on the economic rent extracted by the originators of the "zero sum" ABS and CDOs rather than the concepts themselves; the core thesis being that there would be a lot less profit to be extracted from originating opaque financial products if demand for them wasn't artificially inflated by buyers and sellers being insulated from the downside risk of their decisions.
It's more akin to saying you end up with too many startups getting too much funding in a climate where investors don't do adequate due diligence.
You won't find startups "innovating" in as brazenly cynical a manner as alleged in the Goldman Sachs example the author recounts either...startups don't profit from people shorting the stock they issue.