This letter was published in Financial Express dated 12.07.08
The editorial (‘Future in futures’, Jul 8) supports speculation or the euphemism ‘futures’. On paper, anything which could reduce airfares or stem further rise and cut losses for the airline industry is bound to be welcome. Yet, to say that futures is the future and any fear or doubt is an anachronism, is incorrect. For all the cry of business ethics and professionalism, market economy has not given any evidence of self-correction. Experience, as in commodity futures, has shown that financial muscle will dictate the market. Recent stock market oscillations are ample proof that physical supply or real demand would have little say among a host of other intangible factors. Any speculator or market player who can make the extra dime will go for it. It is against the dictates of profit-seeking to act otherwise. Hence, while ‘genuine’ futures with the sole goal of insulation may not increase prices, there are no safeguards to prevent or control artificial escalations.
—Subhashree Kishore, New Delhi