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To: DuckTapeSunroof who wrote (41563)3/1/2010 5:04:00 PM
From: TimF  Read Replies (1) | Respond to of 71588
 
So would putting money regularly on "red" at the wheel in Vegas.

Putting money on red, has an expected negative return not a positive one. Its not an investment at all. Proprietary trading can be risky, but it doesn't have to be, and often isn't all that risky, and risky or not it has a positive expected return.

But BOTH also GREATLY INCREASE the risks of catastrophic collapse

Propitiatory trading, that isn't too large a part of the income/asset base, and that isn't too highly leverage does no such thing, in fact it may reduce the risk of catastrophic collapse (of course the point where it does become too big or too leveraged could be debated, and you might reasonably argue its low enough to often be exceeded).