Derivatives

Credit default swaps? Theyre complicated -- and scary! The receipt you get when you pre-order your Thanksgiving turkey? Not so much. But they have a lot in common: Theyre both derivatives. Senior Editor Paddy Hirsch explains.

Category:

Education

Tags:

• Marketplace
• whiteboard
• derivatives
• economics
• business
• financialcrisis
• paddyhirsch

[TehCommentMaster]

Love the pen throw.

[WuTang011]

I wish my university would hire you as a professor.

[TheMatthias111]

@jwheyer I think your not opening your mind in reality because I realize what your saying but it is incorrect. Not all business transactions harm one party. Some certaintly but not all. The trader speculating serves a valuable function by providing liquidity to the farmer and all this volume optimizes the price to be fairest for all parties. Who would write futures contracts when grains are so lucrative that the crushers cant make money now? Only speculators. What we need to fear is leveraging.

[jwheyer]

@TheMatthias111 No in my ideal world people use what they need and don't accumulate excess at the expense of many others... If you think our current situation will continue for much longer or is sustainable in any sense, then you are not opening your mind.

[calexander230]

Awesome.

[Fernand1Ja]

This is a great video. The concept has been explained so easily and in a language that anyone can understand.

O. Fernandez

[TheMatthias111]

@jwheyer So in your ideal world does the farmer fall in love with his grain and cattle and not sell them for the profit?

[logicthreedee]

Fantastic explanation. Clear, succinct, and enjoyable! Thanks.

[jwheyer]

One of many reasons i hate money... People use our commodities, and natural resources (the underlying) for their own self interest, which is purely profit. They have no interest in the products being sold nor the people being affected by their transactions.. Simply numbers on paper and money in the bank to them.

[jormoria]

the drink signature!!!! I love it!!!