General Discussion
In reply to the discussion: Wait, the Derivatives market is worth $1,200 TRILLION dollars??? [View all]jmowreader
(50,745 posts)I think one of the big attractions of derivatives is that no one knows what the hell they are, including the people in the business. (We've run probably fifty articles about derivatives over the last year. In every instance when a complex derivative was named and described, the description was for the wrong derivative...in most cases, a "CDO-squared" (collateralized debt obligations created by tranching other CDOs) was called a "synthetic CDO" (a CDO created by tranching naked credit default swaps--these were the securities at the heart of the Goldman Sachs scandal). But you have to give them SOME credit--at least they didn't call them safe investments.)
The biggest problem in the credit derivatives market is the regulating body: there's a federal agency called the Commodity Futures Trading Commission, but credit derivatives would most properly be regulated by the Nevada Gaming Commission.
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