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Chet Ruminski Wrote: Every financial news source says that derivatives are ready to implode at any time. The precipitating conditions are greater now than in 2008. Why wasn't that debated.
Chet asks a good question, and the simple answer is that derivatives are much too complicated for the average American, and except for a very few people in Congress like Elizabeth Warren, politicians are not going to show their ignorance. But the question that Chet asked is a good one...just not for a debate of this sort where any answer that exceeds the normal length of a "sound bite" becomes lost in the mind of the listener. Anyway, getting back to Chet's concern, this article is a starting point for discussions:
Global Research, August 24, 2015: Global Derivatives: $1.5 Quadrillion Time Bomb
""When investing becomes gambling, bad endings follow. The next credit crunch could make 2008-09 look mild by comparison. Bank of International Settlements(BIS) data show around $700 trillion in global derivatives.
"Along with credit default swaps and other exotic instruments, the total notional derivatives value is about $1.5 quadrillion – about 20% more than in 2008, beyond what anyone can conceive, let alone control if unexpected turmoil strikes."
AMC is right to ask what form of derivatives. A simple look at Wikipedia, will list several forms of derivatives including such instruments as collateralised debt obligations (CDOs), swaps, credit default swaps, futures contracts, options, mortgage backed securities, and options. All are too complicated to have for discussion in a debate. None of these are "evil instruments" by themselves. They work fine if you are dealing with honest brokers or professionals that understand that these are highly risky and highly unregulated. Unscrupulous trading in mortgage backed securities is one of the major causes that triggered the Great Recession.
Just to be clear, I don't necessarily endorse the sense of "panic" conveyed in the Global Research article. However, it's a good starting point for debating.