It turns out that I have a connection to the whole JPMorgan Chase Fail Whale trades. The guy who led the hedge fund pushback against the London Whale, the one who took the other side of the bet, the one who made the profit off of JPM’s massive loss, is a guy named Boaz Weinstein. He’s a friend of a friend from college.

It was last November, and Mr. Weinstein, a wunderkind of the New York hedge fund world, had spied something strange across the Atlantic. In an obscure corner of the financial markets, prices seemed out of whack. It didn’t make sense.

Mr. Weinstein pounced.

As the financial world now knows, what was out of whack was JPMorgan Chase & Company. One its traders, Bruno Iksil, the man later nicknamed the London Whale for his outsize trades, was about to blow a multibillion-dollar hole in the mighty House of Morgan.

I don’t really have a problem with Weinstein’s conduct in this case. I’m sure we’d have plenty else to argue about. He’ll probably pay 15% in taxes on this profit next year, rather than the 35% top rate, by using the carried interest loophole. That’s ridiculous. And Weinstein did deal credit derivatives at Deutsche Bank, losing $1.8 billion for the bank during the financial crisis in 2008. But in this case, he saw an opportunity and exploited it, and didn’t use one dime of unsuspecting depositor funds, or any implicit taxpayer guarantee, to do it. He shouldered the risk and came out ahead.

Hey, that’s gambling, and if that’s what this guy wants to do with his money, go ahead. I object to the use of the implicit too big to fail guarantee, the discount window, political influence, inside information, rigged rules and virtually unlimited depositor funds that go along with any trader at a bank who tries to play this game. The idea that a victory will send profits to the bank balance sheet, but a loss will simply get socialized by the government, turns the idea of risk completely on its head. JPMorgan didn’t have a real risk oversight board – they’re claiming to build one now, along with some belated efforts at accountability – because they didn’t need it. Implied protection from the taxpayer was all the risk insurance they required.

It turns out that, unlike Boaz Weinstein, a significant amount of these hedge fund traders don’t do so well for their clients when they aren’t backed by a giant bank. If there’s such a thing as a free market, I suppose that means that the worst traders will fall out, and investors will take their money to those who can bring a return. And if they lose, they lose. The government has no bearing on the deal.

I would be open to banning the financial instruments that really have no social purpose, like naked credit default swaps, where you don’t even have to own the underlying security. And the idea of clearinghouses and exchanges for derivatives is a good one (although by the end of the Dodd-Frank implementation process, they could be rendered useless). But as long as the hedgies are taking their own risks, and the investors understand them, and my tax dollars have nothing to do with the transaction, I say go for it. If that’s your idea of fun over a weekend in Vegas, rock on. Just don’t come running to me and my 310 million friends when it all falls apart.