Derivatives need to die.
That's a lot of dying.
In this case derivatives could protect the owners of the high risk bonds that are liable to default.
There’s nothing wrong with derivatives per se but they do need a regulated market. There was a huge problem with credit default swaps during the housing bubble because you were able to buy swaps betting against contracts that you weren’t a part of. It was like taking out life insurance on someone else and benefiting if they died.
Bring back the ‘Uptick’ rule.
But there are trillions of dollars in derivatives that are going to go belly up.
Just ask the guys who were shorting the Swiss Franc last week. They got wiped out in ten minutes. TEN minutes. Billion dollar operations were wiped out. Do you think that might leave a mark somewhere?