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Subject:  Re: Derivatives rules -- loose as usual Date:  5/17/2013  1:57 PM
Author:  SuisseBear Number:  423121 of 536970

Derivatives were invented approximately 3,000 years ago to hedge risk.

The quaint old days when a producer and a wholesaler agreed on a viable price in advance.

Contrast that with today where derivative bets on any commodity amount to many times what exists as an actual underlying.

Or CDOs (yup, credit derivatives) layered on the lowest quality tranches of a subprime paper portfolio...

They have yet to break a financial system.

Ah but what would have happened had AIG with all its CDS exposure not been bailed out...
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