No.
Why not? That's what caused all the problems. Mortgages. Mortgages that they could have written under Glass Steagall.
That's nice. However we still issue bonds and t-bills to pay debt which creates even more debt and as such, each time you do so, you create more dollars in the system.
That's nice. But you said the Fed was printing money. They're not. They stopped.
Most of them are based on glorified mathematical equations involving interest rates and swaps and options and mortgage backed securities etc.
You said they were based on nothing.
The problem with them is most of it is traded by people who have little understanding of what exactly the product is.
How do you know? Do you trade them?
Derivatives aren't based on real things but more on pure math.
They are based on real things. Real commodities, real interest rates, real stocks, real bonds.
Money is created by way of policy involving interest rate manipulation etc. by the FED. Lower interest rates allows more borrowing and allows the Gub'ment to issue more debt than the could at a higher rate. It]s all connected my friend and the FED is at the heart of it.
"You said they were based on nothing."
Yes, exactly. Pepsico makes physical things. Most companies do and when you buy stock in them you can measure their worth in physical output. Derivatives are not, they are mathematical concepts, they are vapor much like our dollar. You can create them out of thin air by moving numbers around.
"They are based on real things. Real commodities, real interest rates, real stocks, real bonds."
No they are not. They are math formulas using other things like interest rates. (BTW calling an interest rate a real thing is funny. Do me a favor find me a physical interest rate. Not numbers on a page of text etc. a physical from not a representation)
And no I do not trade in derivatives. I don't invest in things that can't be described in a simple single sentence. It's why I didn't jump on the ENRON bandwagon even though all the brokers I dealt with at the time said it was a sure fire bet. Many of those same guys are telling me derivatives are the way to go right now.