What is the primary motivation for buying derivatives on such a large scale in the first place?
What is the huge risk that must be hedged against?
Far from being the cause of economic crisis, the bulk of derivatives contracts are symptomatic of the market's attempt to compensate for the monetary whims of central banks, to find more stability in an inherently risky fiat money regime.
ngonea - Greed is nothing more than insatiable desire. Everyone who strives to produce a better life for themselves is greedy. Greed is good, it's the motive that drives production.
There are two opposing sides to every CDS contract so there is no systemic vested interest in defaults -- at all times there are just as many traders betting for defaults as against.
Derivatives are being demonized as inherently "toxic assets" in order to further the myth that unregulated capitalism is to blame for the financial crisis, details in this article: "The Myth that Laissez Faire Is Responsible for Our Present Crisis".
I hear that anyone could buy derivatives (CDS), even on investments they never owned (side bets). Just buy corp stocks and call it's bookkeeper (cook the books).
This video is right on. It's not the mortgages, it's not the defaults, it's the derivatives. They wrote more derivatives than anyone has any ability to ever pay off if they go bad. And they went bad.
In a disaster or force majeure scenario where it becomes impossible to perform under the terms of a contract, it is not the contract that is the cause of the problem, it is the external force that is the origin of harm. Don't blame derivatives for the actions of the Fed.
It is true that there was massive fraud in this fiasco, but it is also true that the government sanctioned, aided and abetted this fraud in many ways. This crisis is bigger and deeper than derivatives. If you want to comprehend it, you'll need to study economics, in particular Austrian business cycle and monetary theory.
Thanks I've read Human Action. Austrianism is a proscriptive moral system, not a science.
If you were really an Austrian, shouldn't you be angry that CDS is basically another form of fractional reserve, and increases inflation (Austrian definition)?
Since you've read Human Action then let me remind you that Mises takes great pains at the outset to separate and delimit economics from morality. He takes as given the fact that men act to achieve ends, which he explicitly says are subjectively chosen and outside the scope of economics.
It isn't necessary that a CDS be fractionally backed, nor is there fraud if both parties understand that where there is a fractional backing that there is also uncovered risk.
One of the best articles that explains the economic crisis in essential terms is: "The Crisis in 10 Points" by Robert Stewart.
The economic bust was primarily caused by the Fed -- they forced interest rates below the natural rate of interest, fueling an unsustainable credit expansion boom that resulted in tremendous malinvestment and overconsumption.
Roger W. Garrison explains how the Fed lost its way in this paper: "Interest-Rate Targeting During the Great Moderation: A Reappraisal".
I really liked your channel and this video. If you need any help getting this video exposed I use a site called tubeviews.(net) It has really helped like 20 of my main videos get to the top in position. Its nice.
THIS WORKS! Its amazing.. THANK YOU SO MUCH DUDE!!!!!!
havnt u listened to the video muzzatube "the exposure to dirivatives is 140 trillion, or four times world GDP!" You cant absorb these levels of losses, its sufficient to bankrupt the world 4 times over!
Not HFs or PFs holding the winnings , it's the Rothchilds and JPM , ever noticed that everyone loses except them , when have you heard their names amongst the losers in this game. Citi/Bear/Lehman - yeah but the other 2 no.
Not about $ anymore about POWER , the start of the NWO.
You got that right klguy bro. It is all about Power and NWO. Everyone please wake up and unite against the Luciferian Agenda.
This is the same player that sacrificed 6 millions or so Jews to get the state of Israel and millions of Iraqis to control the land of Babylon and not forget 3000 lives on 911 to get blanket approval on fighting "terrorism".
now they are pushing fir the endgame.everyone needs to talk more and as load as we can.People in the US need to organise BIG marches to NY and Capital hill.
Total sub primes is less than $1T...actually all the current US mortgages could be paid off or saved for $2T easily. So how can the US gov't be on the hook for $7.8T and it keeps rising. The sub-primes were not the issue...they highly leveraged Derivatives bets on them and counter bets on failure aka CDS, by people that didn't even own the MBS is the true engine behind this. $1,000 Trillion (or $500-$800 Trillion) in a pile can't exist with only $60T in world GDP.
The Derivative debt out exceeds the entire supply of money on the planet. In other words GAME OVER we lose! Think of a Monopoly game and everyone is sitting at the table but the money has run out. This is why the banksters are hoarding it and no one can get loans. I predict Obama will start over and print new currency. So as you watch the LIES on the news keep this in mind. this is why they had the secret meeting in congress awhile back. Thanks to Phil Gramm Alan Greenspan and the Right Wing.
Good question. As I see it there is not enough money in circulation to close the derivative deal. For example if we make a bet for the sum of a million dollars it is a zero sum game. I lose a million, you gain a million. However if we suddenly realize that neither of us have the million to pay off the bet, and to make matters worse have used this bet as an investment tool... you can imagine what happens next. I'm no expert as you can tell and tell but I think the analogy is a valid one
WEll we did not get another FDR, we got another BUSH, kissing the as_ of the Queen of England, our colonial master, who works for the Pope of Rome
ngonea 2 years ago
What is the primary motivation for buying derivatives on such a large scale in the first place?
What is the huge risk that must be hedged against?
Far from being the cause of economic crisis, the bulk of derivatives contracts are symptomatic of the market's attempt to compensate for the monetary whims of central banks, to find more stability in an inherently risky fiat money regime.
learninglemur 2 years ago
learninglemur - the primary motivation is greed, the risk that must be hedged is the created
default, they have a vested interests in defaults
just like doctors and pharma companies in America have a vested interest in us being sick, they make a profit
ngonea 2 years ago
ngonea - Greed is nothing more than insatiable desire. Everyone who strives to produce a better life for themselves is greedy. Greed is good, it's the motive that drives production.
There are two opposing sides to every CDS contract so there is no systemic vested interest in defaults -- at all times there are just as many traders betting for defaults as against.
learninglemur 2 years ago
Derivatives are being demonized as inherently "toxic assets" in order to further the myth that unregulated capitalism is to blame for the financial crisis, details in this article: "The Myth that Laissez Faire Is Responsible for Our Present Crisis".
learninglemur 2 years ago
I hear that anyone could buy derivatives (CDS), even on investments they never owned (side bets). Just buy corp stocks and call it's bookkeeper (cook the books).
saintveil 2 years ago
This video is right on. It's not the mortgages, it's not the defaults, it's the derivatives. They wrote more derivatives than anyone has any ability to ever pay off if they go bad. And they went bad.
CarryANation 2 years ago
In a disaster or force majeure scenario where it becomes impossible to perform under the terms of a contract, it is not the contract that is the cause of the problem, it is the external force that is the origin of harm. Don't blame derivatives for the actions of the Fed.
learninglemur 2 years ago
BS, the "side letters" PROVE the transactions were fraudulent. The people who did this need to be in prison for fraud.
CarryANation 2 years ago 2
It is true that there was massive fraud in this fiasco, but it is also true that the government sanctioned, aided and abetted this fraud in many ways. This crisis is bigger and deeper than derivatives. If you want to comprehend it, you'll need to study economics, in particular Austrian business cycle and monetary theory.
learninglemur 2 years ago
Thanks I've read Human Action. Austrianism is a proscriptive moral system, not a science.
If you were really an Austrian, shouldn't you be angry that CDS is basically another form of fractional reserve, and increases inflation (Austrian definition)?
CarryANation 2 years ago
Since you've read Human Action then let me remind you that Mises takes great pains at the outset to separate and delimit economics from morality. He takes as given the fact that men act to achieve ends, which he explicitly says are subjectively chosen and outside the scope of economics.
learninglemur 2 years ago
It isn't necessary that a CDS be fractionally backed, nor is there fraud if both parties understand that where there is a fractional backing that there is also uncovered risk.
learninglemur 2 years ago
learninglemur - classic! yeah right it's the invisible hand, right ? Keyensian = USURY period!
ngonea 2 years ago
The FIASCO book is great too!
Dangerdoom68 2 years ago
One of the best articles that explains the economic crisis in essential terms is: "The Crisis in 10 Points" by Robert Stewart.
The economic bust was primarily caused by the Fed -- they forced interest rates below the natural rate of interest, fueling an unsustainable credit expansion boom that resulted in tremendous malinvestment and overconsumption.
Roger W. Garrison explains how the Fed lost its way in this paper: "Interest-Rate Targeting During the Great Moderation: A Reappraisal".
learninglemur 2 years ago
i just got her book and i cant wait to read it!
inthebluescrossroad 3 years ago
This book is AMAZING. Easy read
JoeTube27 2 years ago
This has been flagged as spam show
I really liked your channel and this video. If you need any help getting this video exposed I use a site called tubeviews.(net) It has really helped like 20 of my main videos get to the top in position. Its nice.
THIS WORKS! Its amazing.. THANK YOU SO MUCH DUDE!!!!!!
Shivdesy 3 years ago
I'd qualify the title of the video, so that it's easier to see where the problem lay: It's the Invisible OTC Derivatives Stupid.
Derivatives can be something like a simple option.
It's those dang invisible OTC Derivatives
AirelonTrading 3 years ago
Oh, and 5*'s
AirelonTrading 3 years ago
Trump Entertainment Resorts is bankrupt not the Trump Organization.
brosight 3 years ago
Trump filed for bankruptcy. This has been fun so far.
CYLONEJACK 3 years ago
she for gets to say that FDR also made a law that US citizen that held gold to give to the US gov. If they could have been in prisoned
madphat7 3 years ago
havnt u listened to the video muzzatube "the exposure to dirivatives is 140 trillion, or four times world GDP!" You cant absorb these levels of losses, its sufficient to bankrupt the world 4 times over!
GaryNev001 3 years ago
Not HFs or PFs holding the winnings , it's the Rothchilds and JPM , ever noticed that everyone loses except them , when have you heard their names amongst the losers in this game. Citi/Bear/Lehman - yeah but the other 2 no.
Not about $ anymore about POWER , the start of the NWO.
KLguy133 3 years ago 2
You got that right klguy bro. It is all about Power and NWO. Everyone please wake up and unite against the Luciferian Agenda.
This is the same player that sacrificed 6 millions or so Jews to get the state of Israel and millions of Iraqis to control the land of Babylon and not forget 3000 lives on 911 to get blanket approval on fighting "terrorism".
Does anyone think they care for our lives?
alphamain 3 years ago
alpha hi,
now they are pushing fir the endgame.everyone needs to talk more and as load as we can.People in the US need to organise BIG marches to NY and Capital hill.
KLguy133 3 years ago
Total sub primes is less than $1T...actually all the current US mortgages could be paid off or saved for $2T easily. So how can the US gov't be on the hook for $7.8T and it keeps rising. The sub-primes were not the issue...they highly leveraged Derivatives bets on them and counter bets on failure aka CDS, by people that didn't even own the MBS is the true engine behind this. $1,000 Trillion (or $500-$800 Trillion) in a pile can't exist with only $60T in world GDP.
thehighlndr 3 years ago
The Derivative debt out exceeds the entire supply of money on the planet. In other words GAME OVER we lose! Think of a Monopoly game and everyone is sitting at the table but the money has run out. This is why the banksters are hoarding it and no one can get loans. I predict Obama will start over and print new currency. So as you watch the LIES on the news keep this in mind. this is why they had the secret meeting in congress awhile back. Thanks to Phil Gramm Alan Greenspan and the Right Wing.
chris2fer43 3 years ago 5
Probably this is naive, but why not just default on all 'derivatives'?
Also, if there are 100s of trillions of losses, arnt there also big winners ?
Eggy0 3 years ago
Good question. As I see it there is not enough money in circulation to close the derivative deal. For example if we make a bet for the sum of a million dollars it is a zero sum game. I lose a million, you gain a million. However if we suddenly realize that neither of us have the million to pay off the bet, and to make matters worse have used this bet as an investment tool... you can imagine what happens next. I'm no expert as you can tell and tell but I think the analogy is a valid one
RBtoobsalot 3 years ago 2
*****
ubuibiok 3 years ago