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Futures and Options contracts are not "over the counter derivitives". They are an unregulated private contract between two parties and even Greenspan has said he does not know how to regulate them. The are an etherial, self-delusional agreement between 2 parties which 'gives the appearance' of a no-lose investment. Bank of International Settlement puts the notional value of current derivitive contracts at about 1.5 Quadrillion dollars. The earth and all that is in it does not come close to the current dollar valuation of 1.5 Quadrillion. That is a number which is large, even to astronomers. As long as their value remains notional everything is fine, but when counterparty claims are made, it will be next to impossible to stop the carnage. Bernanke did stop it with the bailouts to AIG and the "to big to fail" banks. The next time, I fear, we will not be so lucky. Right now, the dollar is leveraged 20:1. That is how much debt that is out there. It cannot be fixed in a year, or 10 years or 50 years. It can only continue as long as the public remains ignorant about about these matters....and even then when the public realizes what politicians and the big banks have done only civic upheaval will come...but that will repair nothing.

Options and Futures are leveredged products, but they are highly regulated. They are not the problem. They have margin calls to right a failing position, or in the case of options, the options expire worthless, and the seller derives the benefit. Not so for over the counter derivitives.

Futures and Options contracts are not "over the counter derivitives".

Correct. They are exchange traded derivatives.

The are an etherial, self-delusional agreement between 2 parties which 'gives the appearance' of a no-lose investment.

Really? Neither side can lose? That must mean that neither side can win.

Bank of International Settlement puts the notional value of current derivitive contracts at about 1.5 Quadrillion dollars. The earth and all that is in it does not come close to the current dollar valuation of 1.5 Quadrillion.

So what? Notional value tells you almost nothing about the amount at risk.

As long as their value remains notional everything is fine, but when counterparty claims are made, it will be next to impossible to stop the carnage.

That's a silly claim. Notional value remains notional, no matter what.

Right now, the dollar is leveraged 20:1.

Huh? Makes no sense.

That is how much debt that is out there.

Huh?

It can only continue as long as the public remains ignorant about about these matters..

We'll see these silly claims until the public gets educated.

Options and Futures are leveredged products, but they are highly regulated.

But they're derivatives!!

or in the case of options, the options expire worthless, and the seller derives the benefit.

You mean one side gains and the other side loses? Just like in OTC derivatives?

What about interest rate swaps? Are you scared of them too?