Financial Derivatives Explained in Ten Minutes - Re: Derivative Markets and the 2nd Great Depression

The Financial Meltdown Explained in Ten Minutes

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• Meltdown
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[nomis101uk]

Can I ask - Do derivatives markets serve any social function that would make their prohibition ill adviced?

[JiveDadson]

Yes, derivatives do have legitimate purposes - for hedging and to keep market prices more regular. The derivatives ought to be traded on a market whose management makes sure that there is always more than adequate margin posted. And of course, if a party to a derivative contract cannot make good on it, the government MUST NOT steal our money to pay it off, as has happened repeatedly.

[JiveDadson]

Another big problem was that some of those transactions were shady at best. It's like they sold a house that had hidden cracks in the foundation, then took out insurance on the house (which they no longer owned), and maybe even set the house on fire to collect on the insurance. When the insurance company (AIG for example) could not pay, the US government honored the contracts at 100%. I am sure the moguls at Goldman Sachs are grateful.

[pacom590]

8.14 to 8.25, Excuse me sir, but wasn't a mister Baraq Obama an attorney involved in getting those laws passed by the Carter/Clinton administration? Please Respond.

[JiveDadson]

You may be thinking of his economic adviser, Larry Summers. Obama was young.

[BreezyObserver]

"Four levels based on derivatives, based on derivatives, based on derivatives." Sounds like Inception.

[soulfabric]

Great Job Jive. I recently watched Inside Job and am so furious I could spontaneously combust. I can tell that I have a lot of work to do to truly understand some of the concepts involved, and you did a great job moving that forward. Peace to you as well brother.

[SaharaDeer]

@JiveDadson you've got to be kidding.... no legit place ; the pracitce is disgusting.......

[PythagorasHyperborea]

1ST DOMINO IS ACTUALLY THE FEDERAL RESERVE SYSTEM!!! The Fed along with fractional reserve gives the economy a credit card which naturally get's wracked up until it can't be charged any more. Then we have to start paying it back which literally shrinks the economy back down. THAT IS THE FIRST DOMINO!!!!!!!!!!!!

[sagrocket]

@JiveDadson thanx u rule

[jchamp41781]

Please post more videos JiveDadson- You are a genius- I mean that - you have taken a very complex topic and broken it down into it's simplest form -Please post something on college loan bubble or other derivative markets- I would imagine the derivative markets can be just about anything those corrupt wall street boys would like to bet on....what about commodity bubble or under bubble - I guess dollar bubble is what I mean---what bubbles are next and will make gold/silver go through the roof?

[giggitygiggity890]

@JiveDadson like the price "regulation" jp morgan is smacking down on the silver market??? yea that's what i thought

[G3XRevolution]

Hi, Could you please re-explain the example of the horse race to derivatives. I wasn't able to understand the example. Do the people betting on other events invest in the same derivative? What type of events do the people investing in derivatives bet on?

[ehioze1000]

very good. thank you

[tommydv]

The analogies of the going to the track or insuring Davis Fleetwood's car were right on. This video should be seen by every single person in the USA who has money in a bank. I think that this practice continues on today post-bail-out with weak regulation precisely because 99.9 % of all people don't understand what derivatives are, let alone the dangers inherent with them, and are blissfully ignorant of the fact that banks are still using YOUR money to take those chances. Well done, JiveDadson!