Subject: Tom W. Bell paper
From: <stephen@xemacs.org>
Date: Fri, 1 Sep 2006 23:48:31 +0900

stephen@xemacs.org writes:
 > But this is not really practical, as far as I can see.  What you're
 > looking at here is a large collection of individual securities, each
 > subject to "events" that could imply swings of hundreds of billions of
 > dollars---and the inevitable bankruptcy risk on the side facing the
 > adverse change.  Would I buy a share on a market?  Not a chance,
 > unless it were ultimately insured by something with assets denumerated
 > in the trillions of dollars.  *A mortgage on Microsoft is not big
 > enough.*

*What* was I thinking?  I've been reading Penrose's "The Road to
Reality", maybe I'm so into "infinitesimal" I can't tell the
difference between "big" and "astronomical".

No, this will work the same way as futures for agricultural products;
the swing per market will be millions of dollars at most, and there's
plenty of room for diversification by "large" participants.  In terms
of size, it's a very practical proposal.

I don't see a way around the "insider trading" problem, though.