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To: Taikun who wrote (61559)	4/3/2005 9:58:02 PM
From: shades	Read Replies (1) \| Respond to of 74559

bis.org In the last quarter of 2004 the combined value of trading in interest rate, stock index and currency contracts on organised exchanges fell by 3%, to $279 trillion. project-syndicate.org This guy has a whole series on new financial products and derivatives - so we seem to have a LONG way to go theoretically - we still don't have derivatives on virtual property in online games yet that I can tell - you just have to be creative Message 21193210 project-syndicate.org A new financial product? Growth linked Bonds? project-syndicate.org Most homeowners are not gambling for pleasure. They are just buying real estate because they need it. But, because they do nothing to protect themselves against their real estate price risks, they are unwitting gamblers. In fact, home buyers in most countries do nothing to protect themselves – short of selling their homes – because there is nothing to be done. A market for real estate derivatives that can help balance these risks is only just beginning to appear. Well-developed markets for real estate derivatives would allow homeowners to kick the gambling habit. A liquid, cash-settled futures market that is based on an index of home prices in a city would enable a homeowner living there to sell in a futures market to protect himself. Attempts to set up derivatives markets for real estate have -- so far -- all met with only limited success. In May 2003, Goldman, Sachs & Co. began offering cash-settled covered warrants on house prices in the United Kingdom, based on the Halifax House Price Index and traded on the London Stock Exchange. In October 2004, Hedgestreet.com began offering “hedgelets” on real estate prices in US cities – contracts that pay out if the rate of increase in home prices based on the OFHEO Home Price Index falls within a pre-specified range. I wonder if General Chen's online games have characters and castles that need derivative protection! People kill over that stuff - literally. We need a whole new sector of virtual financial products, insurance, and derivatives for virtual goods - the matrix has you Neo. Who knows, maybe that might have saved the guys life in the message above.

To: Taikun who wrote (61559)	4/4/2005 2:47:25 AM
From: TobagoJack	Respond to of 74559

David, <<... derivatives market. Does it have a theoretical limit?>> ... apparently not, because it is just paper backed by more paper; and can write derivative on derivative; pool same, and derive once more :0) <<... at one year global GDP?>> ... we are already at bigger than that, as in 74 trillion ;0/ <<Is liquidity cyclical?>> ... think so, else history ends. <<couldn't the contraction in the derivatives market from here greatly shrink liquidity?>> ... that is the idea, and QCOM will be amongst the slaughtered many. Chugs, Jay