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Strategies & Market Trends : The coming US dollar crisis
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To: maceng2 who wrote (59101)10/21/2016 2:02:52 AM
From: Elroy Jetson  Read Replies (1) of 71454
 
eBay makes a good income collecting the transaction fees on $8 billion of sales.

But like real estate brokers who sell trillions of Dollars of real estate transactions, they don't take a position in the transaction, and neither should well run investment banks.

You could tell a story that the rise in the total value of transactions on eBay and through real estate brokers is frighteningly out of control, real estate transactions usually much larger than the GDP of the nation where the sales take place.

These transactions are both a derivative of the underlying economy and part of the economic activity. But they're not frightening nor do they pose unimaginable risks. It's just daily life.

If you're a smart middleman and take on risk, you pass on this risk to others with sufficient capital to cover the risk - while you merely collect the transaction fee. That's what it's all about.

The people buying a house, an oil contract, or industrial equipment on eBay - they're all taking a risk and if they didn't pay cash they needed to put up enough capital to facilitate their ownership. Those are all positions, positional trades, which are far scarier to me. They presume on the future as if those taking these positions were clairvoyant. Much better to take your transnational fee and move on.
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