Morning Reading: Financial Innovation for Beginners

Financial Innovation for Beginners

real innovation is good, some financial innovation is good, but some financial innovation just pushes money around, which could be good or bad.

This is a very good text for beginners. Here I just give me ideas on how to tell a financial innovation is good or bad. My opinion is that we cannot tell. Let me make it clear what is mean 'bad' ('good') to financial innovation. If a financial innovation make a scare resource more efficient than before, it is good. To reach being more efficient, some cost is needed to pay. If the cost is more than the benefit, the efficiency must be less than before. But also the cost is difficult to find out (observed), if without reaching a full competition.
Some people lost money is not a standard to tell a financial innovation good or bad. Its the result of a game. Every game has loser(s).

To me, it's nonsense to debate the relationship between current crisis and financial innovations. We just cannot make clear debate without clear observation (to the benefit and cost of any financial innovation).