Removes the risk? The risk that the speculative exchange created in the first place?

No, the risk that is transferred in the exchange.

There is no real risk in speculation until it becomes a bubble and bursts. If that's what you're referring to skrum then there's all the more reason to do away with speculation. We'd get rid of bubble-caused recessions.

The definition of speculation from Wikipedia:

"In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum."

Sounds like risk to me.

Don't even bother arguing with BO. He makes contradictory statements all the time; and never addresses them. Then he makes statements that are just completely baseless and lacking elementary knowledge about topics he claims to study and have passion for.

[Citation needed] dead?

as funny as I find it that I make you upset enough to obsessively slander me and derail my topics you need to try a bit harder than nonsense like that. You're the king of hypocrisy.

Skrum: by your understanding speculation is essentially gambling on the value of whatever commodity is being speculated on? Except instead of the winnings going to and from the house they come and go from people that actually worked for their money. How are you morally okay with that? Do you really feel that's ethical? And lastly do you really believe banks should be allowed to do that with your money?

It's ethical because one of the parties is avoiding risk and there's nothing unethical about tranferring risk to someone else if the someone else is freely accepting the risk.

Separate ethical issues arise if one of the parties is much bigger than the other.

In the current housing crisis, Canadian banks have come out in much better shape than U.S. banks. Improvements could be made to our banking laws and regulations based on the Canadian model.

BO, do you realize that speculation sometimes results in a loss? Thus the whole "risk" factor.

thraxle, I am pretty sure that speculators as a whole gains, and they gain quite alot of money too.