#1 Derivatives: The Unregulated Global Casino for Banks12-29-2012, 07:09 PM
Free markets? Yeah, right.
Excellent graphic display of mega-banks' exposure to derivatives - Really cool Be sure to scroll all the way down to the bottom to see the full picture. So ridiculous, it has to be seen to be believed!
When The Derivatives Market Crashes (And It Will) U.S. Taxpayers Will Be On The Hook
The Coming Derivatives Panic That Will Destroy Global Financial Markets
12-29-2012, 08:15 PM
- Join Date
- Mar 2010
Kind of interesting I think. The definition of a derivative according to the article:
A derivative is a legal bet (contract) that derives its value from another asset, such as the future or current value of oil, government bonds or anything else...........
The usually accepted definition of derivative:
A derivative is a broad term covering a variety of financial instruments whose values are derived from one or more underlying assets, market securities or indices. In practice, it is a contract between two parties that specifies conditions (especially the dates, resulting values and definitions of the underlying variables, the parties' contractual obligations, and the notional amount) under which payments are to be made between the parties. The most common underlying assets include: commodities, stocks, bonds, interest rates and currencies.
No exactly the same. Well, in fact, the two definitions are greatly different, because the articles all point toward the collapse of derivatives as if they were all the same, somehow. All, the article says, will collapse.
But how could that be? There are derivatives which rise as the market falls, derivatives that move contrary to nearly everything imaginable, in fact. To imagine that all derivatives will fall is sort on an Alice In Wonderland scenario, whereby things happen and don't happen all at once.
Doesn't make any sense to me.
12-30-2012, 12:23 PM
Less than 20 years ago, there were no derivatives. How can $600 trillion - $1500 trillion globally (no one knows the real number) be called into existence in less than 2 decades? There isn't that much wealth on the planet. It doesn't even exist.
12-30-2012, 01:38 PM
- Join Date
- Mar 2010
World GDP, I happen to know, is around 64 trillion, but that's a different number.
For that matter, if total wealth in the world were actually at 1500 trillion, that would be 220,000 dollars each (population 7 billion), and that sounds a bit high to me. Actually, I'm being facetious - that's ridiculously high.
It seems to me that some derivatives have a good use. If I thought the Dow was going to go up, I could buy DIA, and if I thought it was going to go down I could buy DOG, and make money as it decreases. I can buy gold long or sell it short by using derivatives. Same with energy stocks, tech stocks, small cap, whatever. What's the harm?
01-01-2013, 11:31 AM
None of this information is really hidden or any part of some dark conspiracy theory. There's plenty of mainstream info on the web that can be researched - bar graphs, pie charts, numerous aritcles, etc.
Last edited by Tecate; 01-01-2013 at 12:04 PM. Reason: add another chart
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