What a surprise that a large bank would construct an investment that it probably knew was bad and then promote it in order to make money. This is the sort of thing that hucksters do. Now, if you believe in Caveat Emptor, you have to feel there was nothing actually wrong with what they did, unless of course they did actively engage in deception. Passive deception, which is what I think they are accused of, is another matter. The fact that someone who was hoping for the investment to fail, was so involved in constructing it may raise questions about whether you would ever want to do business with the hucksters who put the deal together, but it doesn’t quite sound like a criminal act, at least not more so than most of the other shenanigans on Wall Street.
Once you get away from investing and simply engage in speculation, you have in fact opened a casino. The fact is so many of the things traded on the street have little to do with investing and simply reflect bets on what is going to happen. Now, we allow this because it increases profitability to traders and the stock market itself, since the bookies get a cut either way. Give them more things to trade and they make more money. Just handling stock transaction would hardly be worth it.
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