Friday, November 30, 2007

Derivatives bubble?

Gobal financial derivatives ("an investment that derives its value from another more fundamental investment") are now valued at ten times the actual worth of the actual physical planetary assets and production.
Time to buy gold and real estate?


Gunnery Sgt. Hartman, your senior drill instructor said...

It's always a good idea to buy gold. When civilization falls again, you'll need it. You'll be most influential man in village. Big heap gold buy big heap everything else. :)

Monsieur Beep said...

As opposed to the Y2000-bubble, this "bubble" is based on solid global economy, with companies making profits and not merely existing in letter boxes.
A good mixture of gold, shares, and life art is always the best choice you can make.

eolake said...

But the solid part of it is only ten percent.

Eric Hancock said...

It is isn't valid to compare the notional of a derivative to the value of the underlying asset.

Two people might want protection on $100 million of IBM bonds; the notional value of these two derivative contracts isn't comparable to the face value of the bonds.

In this case, neither of the buyers of protection are owed $100 million.

Hiram Lodge said...

Egads! What sort of utter madness is this?
Those people are demented, I say. Not even all the clouds in the sky could hold their insane fantasy dreams of fortune and pots of gold at the end of rainbows.

It's like my spend-happy daughter, Ronnie. She seems to believe I own whole farms of money-trees in Florida.
This wouldn't be so bad for my blood pressure if she didn't insist on dating that bubble-head, walking natural disaster, Andrews boy.