Ive heard some talk about the derivitive bubble, whats a derivitive?

www.buckforchuck.com

www.buckforchuck.com

Here's my video explaining derivatives:

http://www.youtube.com/watch?v=UtwHz7xQZNI

Shameless plug: If you like it, please rate it and subscribe.

... upon fantasy betting, bet upon borrowed fantasy fiat using a sliding-scale.

Basically: Wall Street-Vegas, meets Potemkin Village, meets Three Card Monty, meets, Protection-Racket Insurance Fraud... meets reality.

A "derivative", is all that sold to a customer as a mathematical "chance" derivative, minus the reality part.

The "Derivative Stock" product, is sold to a customer based upon a mathematically 'derived' potential of the [someone somewhere] bank or "home buyer" to EVENTUALLY pay off the [absurd] total "value" of a paper mortgage. For example, if the sidewalk sticker price of a house is $300,000... and after (if someday) all the principle AND interest is paid, the total mortgage value number is close to $1,000,000.

However, odds ARE that the mortgage is unlikely to go the total term before some form of refinance, sale, foreclosure, or the most common modern twist... bank mortgage paper changing hands WITHOUT the home dweller ("buyer") knowing ANYTHING about it. The derivatives market, is the literal betting upon betting, of this mashed together paper against their total theoretical (derived) future potential value.

Fundamentally however, this paper value is now being based upon a mortgage sold to someone with an unlikely ability to pay the total value. "Of course, but don't tell anyone."

The reality IS, that a pile of bricks and sticks labored into a house... will never REALLY be worth more than the total value of its bricks, sticks and labor... no matter how fancy the math... nor especially against the deception of everlasting housing appreciation (because we, we here in the liberty movement, know that "appreciation" against inflation, becomes a flat wash. No actual appreciation.), because the house actually grows older and never MORE valuable than when it was newest or if the actual cost of maintaining it in a livable condition is actually factored in.

This explanation is 'fast and dirty', but I hope there are enough hints within to help toward your own research and more importantly, some confidence to challenge BACK at those who try to tell you "it's complicated", "trust us", "nothing you can do about it", or just "sign here."

Best of luck... to us all.

Here's another "explanation" with more hints and better humor: http://www.youtube.com/watch?v=x2XQ2m2uBPI&NR=1

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"Derivatives are the financial world's weapons of mass destruction", Warren Buffet.

(Unlike financial instruments such as stocks and bonds, a derivative is usually a contract rather than an asset. So in other words, it is a piece of paper not backed by any real assets. Credit default swaps are a derivative because they aren't backed by anything. In contrast insurance policies are regulated and must be backed by assets. I hope this help, I am no expert but this is the way I understand it.)

Trade with all nations; alliances with none. ~Thomas Jefferson

All I know about derivatives is that I heard Warren Buffet avoids them because they are too complicated lol

All I know about derivatives is that I heard Warren Buffet avoids them because they are too complicated lol

http://www.jbs.org/index.php/jbs-news-feed/3644

Ron Paul's Convention Speech

http://the-great-retirement-experiment.com/Products/AIG%20Co...

http://en.wikipedia.org/wiki/Derivative_security

http://www.marketwatch.com/news/story/derivatives-new-tickin...