Derivatives are debt based on other debt

O

orbital 123

Veteran XX
There are upwards of 1+ Quadrillion worth of these things in existence right now. That's 1000 TRILLION dollars. They need to be dealt with, and there isn't enough money in existence to pay all that debt. That means major defaults, or a complete reshaping of the monetary and economic system to forgive all that debt and start from scratch. We are not going to escape these troubles and go back to the good times in the next two years, it will get much worse.
 
Jislan needs to make an :Orbitroll: smiley.




Oh yeah and..

Bailout expanding to insurers - Washington Post - MSNBC.com

The Treasury Department is dramatically expanding the scope of its bailout of the financial system with a plan to take ownership stakes in the nation's insurance companies, signaling new concerns about a sector of the economy whose troubles until now have been overshadowed by the banking industry, government and industry sources said.
Click to expand...

Don't worry Orby, the U.S.A. government will pay, and by that I mean GET OUT YOUR FUCKING CHECKBOOK!
 
End of the "free" market. Greenspan said it himself. He thought the market would "regulate itself". He was extremely naive in his thinking, or he is a liar. In either case, we are going to see massive intervention of governments around the world into the economy. This means world regulations and more government in everyones lives, not just in the economic sector.
 
orbital you havent read enough about this topic

please read about it before posting... the basic concept of a derivative is what you need to study... get the mathematical side first, not the political side of it first
 
lol a derivative doesn't create more money and debt it just places options on existing debt, essentially your just betting on existing debt

read about options markets also while your at it

please take economics/finances classes

later
 
Orbital you don't know how wrong your math is... Derivatives do not mean debt


Did you know that if we carried 1 Quadrillion in actual debt we would all have the net worth of about -3.3 Million dollars per person in the US?

Yes, check the math... that is 1,000,000,000,000,000

and there are 300,000,000 in the USA

DIVIDE bitch

you are saying every man woman and child in the USA has bought the equivalent of about:
200 BRAND NEW Ford Focus automobiles for $15,000 each, or
7 Houses all worth $450,000 each, or
660,000 Little Cesars Large Pepperoni Pizzas for $5 each, or for the ultimate hunger
3,300,000 ITEMS FROM THE MCDONALDS DOLLAR MENU
 
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One use of derivatives is as a tool to transfer risk by taking the opposite position in the underlying asset. For example, a wheat farmer and a wheat miller could enter into a futures contract to exchange cash for wheat in the future. Both parties have reduced a future risk: for the wheat farmer, the uncertainty of the price, and for the wheat miller, the availability of wheat. An important note is that the risk reduction is only between the parties involved. There is still the risk that no wheat will be available due to outside causes, for example, the weather.

Also, stock index futures and options are known as derivative products because they derive their existence from actual market indices, but have no intrinsic characteristics of their own. In addition to that, one of the reasons some believe they lead to greater market volatility is that huge amounts of securities can be controlled by relatively small amounts of margin or option premiums. One reason derivatives are popular is that they can be transacted off-balance-sheet.
 
I am beginning to think that Orbital123 has a real psychological fear disorder

Many people do not fear things they do not understand and this is an obvious case.
 
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