Financial Services Will Get Cheaper, Long-Term

Simply, the long-term cost of financial services is down—technology will see to it. This feature will overwhelm even the politicians’ ability to cause inefficiencies and higher costs.

Million-Dollar Traders Replaced With Machines: Credit Markets– Bloomberg Businessweek

Capital Markets Innovation Goes on, and it Is Good

Amid the relentless outcry on the “dangers” of new financial products over the last years, it’s easy to forget that financial innovation—while of course it has its dangers—most often creates more information, more access, and greater versatility.

One such recent example is Howard Lutnick’s (of Cantor Fitzgerald) idea to create a derivatives market in property, pegged to rents, as a way to hedge against volatility in individual regional prices, or even to specific structures. 

Cantor Aims to Change Game: Idea for Property Derivatives Pegged to Rents Arises From Surprise Acquisition — Dana Rubinstein

This is a great idea. It will simultaneously give folks ability to hedge against their property if they so choose and also allow market speculators to provide information in the form of prices on future expectations. (Yes, that’s generally a good thing.)