[Red in Blue PA]

If a few people can take down the entire economic world, then perhaps derivitives trading should be more closely regulated, or done away with entirely.

We didn’t have it in the 1950’s and somehow we managed to thrive and prosper!

[politicket]

If a few people can take down the entire economic world, then perhaps derivitives trading should be more closely regulated, or done away with entirely.

Too late - it's already "wound around the axle". Investment houses no longer trust each other, since they know what sits "off the books" in their own house.

That's the reason the Fed had to step in and prop up Bears. They didn't really care if Bears and its shareholders went under, but they were deathly afraid of what worldwide derivatives would unravel if they let it happen.

Think of the dollars tied up in derivatives worldwide. We have a national debt above 9 trillion dollars - which is horrendous, but the derivatives amount to around 750 trillion (or 3/4 of a quadrillion) dollars. Can you now see why Bernanke looks so stressed all of the time?