Who says your old Rivrdog can't be PeeCee, eh?
This post isn't about me, though, it's about speculative wagering passing as commodities trading. InTrade.com has been forced out of business by the Feddle Gummint because it's a betting house masquerading as a commodities broker. Or maybe a commodities broker marketing wagers. Or something.
John Stossel, Fox' great tilter-at-windmills, writes a piece about the action.
I follow a different path here. I'm of a more conservative school of investors, and I believe that even options trading is nothing but wagering. Development of "Spiders" or Exchange-Traded-Funds, is all about wagering, not investment.
Put it this way: if you want to buy a piece of a company, follow it's fortune with your investment, and trade that piece of a company on an open exchange, fine, you are an investor, and you deserve to call yourself one.
If you want to make a wager on whether a company's stock will rise or fall next week, you are not an investor, you are simply a bettor. Income from betting is simple, personal income, and should remain that way. Calling it investment income muddies up the tax waters and shouldn't continue as tax collection practice.
All these side-bets on the economy have a name: derivatives. All derivatives trading needs to be completely separate from trading a company's public stock, but it isn't. Put and call options, futures trading in common stock (as opposed to futures trading in commodities such as wheat or oil) and all forms of speculation on currencies need to be regulated as wagers, taxed as wagers and called wagers. The exchanges which permit their "trading" (read: making and collecting bets) should not be allowed to host trading in common stocks or bonds.
Read this post by Oleg Volk. He challenges the current and probably phony Government report on inflation with his own calculations. If the Government can lie to us that badly about something basic such as the loss of purchasing power of our dollars, how can we trust them to regulate sophisticated instruments of trading such as derivatives? If those derivatives are not regulated, though, and they become entrenched in the very fabric of our economy, then the entire economy is based on false pretenses. There is ample history of what happens next. The "fiscal cliff" isn't even a minor pot-hole compared to that fiscal debacle, which will properly be called a collapse.