The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: Larry S. who wrote (27715)	3/26/2010 9:04:14 PM
From: Slumdog	3 Recommendations Read Replies (1) of 71477

>>Any questions?<< YES! >>Easily Understood Explanation of Derivative Markets<< Yes a funny story, but I don't see derivatives explained anywhere. DRINKBONDS, ALKIBONDS and PUKEBONDS. as dubious as they are, are not derivatives, but securitized instruments. A derivative, by definition, is "derived" from the underlying security. It's the DEFAULT SWAPS that are the derivatives! I'll modify the story a bit. ......The bankers go to Heidi's bar for a drink one day and see for themselves what a sorry lot of reprobates make up Heidi's clientele. So, while continuing to sell DRINKBONDS, ALKIBONDS and PUKEBONDS, to the unsuspecting buyers, they enter swap agreements with GAGA, the Insurance giant. The amount of swap agreements open are tantamount to every neighbor in a 5 mile radius collecting the same liability if Heidi goes belly up. THOSE are derivatives. What this story explains is not derivatives but motgage-backed securities and bailouts. Sheesh! There are eight people recommending your post. I dont think they have a clear understanding of derivatives either.

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