I AM STUNNED!
[email_link]
Oh joy! And you all thought things have changed…that these people learned their lessons of too much derivatives. You all thought the regulators did something about this enormous blob of #%&#@. Of course, according to these masters of the universe, everything is under control. Go check out the underlying numbers on these opaque instruments. I am stunned!
LONG STORY: 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. Ex- A derivative buys you the option (but not obligation) to buy oil in 6 months for today’s price/any agreed price, hoping that oil will cost more in future. (I’ll bet you it’ll cost more in 6 months). Derivative can also be used as insurance, betting that a loan will or won’t default before a given date. So its a big betting system, like a Casino, but instead of betting on cards and roulette, you bet on future values and performance of practically anything that holds value. The system is not regulated what-so-ever, and you can buy a derivative on an existing derivative.
SOURCE: http://demonocracy.info