In truth, there is no reason a financial system has to be this complex and so volatile. There is no reason it has to divert so much of the country’s talent and capital, and to siphon off so much for traders and bankers and hedge fund managers. With a bit of intelligent regulation, we could have a financial system that is simpler, less risky, less expensive and less susceptible to manipulation.
There is a cost to the kind of financial “innovation” that produces instruments such as the Velocity Shares Daily Inverse VIX Short-Term Exchange-Traded Note. And my guess is that those costs now greatly exceed the benefits.