Derivatives
posted by The Vidiot @ 8:09 AM Permalink Though I haven't mentioned the derivative market recently, I think it's time for a refresher course. Derivatives are these things that are basically an amalgam of financial instruments like bonds and things. Ostensibly designed to protect investors from fluctuations in interest rates, commodity prices and currency values (or speculate on those fluctuations.), they are, in reality, more like a house of cards. Anyway, GM's latest measure taken to save the company has sent shivers down the spines of some derivatives markets.Excerpt: Timothy Geithner, president of the New York Federal Reserve, warned in a recent speech that the $300,000bn derivatives market had raced ahead of the infrastructure needed to support it. He said the plethora of new instruments may have led to a more dangerous concentration of risk.
If derivatives start to collapse, not even overprinting money can help us.
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