Credit default swaps aren't the answer.

Photographer: Maria Lamagna/Bloomberg

China's Deleveraging Will Likely Fall Short

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China’s Bad Credit 

The good news is that China is trying to defuse its debt bomb; the bad news is that creating a market for credit default swaps likely won’t be enough. Christopher Balding warns that unless the government starts letting the market price risk properly, debt will continue to grow.

Libertarianism’s Time Has Come and Gone

Libertarianism may have been the ideal political philosophy for the latter half of the last century, when the Soviet Union and Mao’s China were major world powers. But Noah Smith says its simplistic view of human relations doesn’t hold up well anymore.

The Cashless Society Is a Creepy Fantasy

Giving up cash might be fun to imagine, but in reality, it would mean banks discriminating against politically unpopular groups — and drug traffickers doing business as usual. Elaine Ou says the loss of freedom is a high price to pay for something that wouldn’t work anyway.

For Democrats, Winning the Senate Is Crucial

Even if Hillary Clinton is elected president, a Republican-majority Senate could block her nominations and agenda. Albert R. Hunt explains why both parties are paying close attention to seven races that could shift the balance of power. 

Goldman’s Libya Derivatives Were Fine

On Friday, the Libyan Investment Authority lost its lawsuit against Goldman Sachs. Matt Levine boils the case own to a single question for banks: “[If] you come across a customer with a gigantic pile of money, and the customer isn’t especially sophisticated at finance, and you rub your hands together in glee about how much money you can make, and you wine and dine the client, and you get the client to do some big trades, and the customer doesn’t exactly understand every detail of the trades, and they work out badly for the client, and they look in hindsight kind of stupid, but they make you a lot of money — is that bad?”

Ritholtz’s Reads

  • Walt Mossberg: Why does Siri seem so dumb? (Recode)
  • Can building luxury condos fix the affordable housing crisis? (Curbed)
  • Brad Katsuyama Q&A: “I don’t think we would have survived if it was just hype” (Bloomberg Markets)

(Read Barry Ritholtz’s full daily news roundup.)

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