Financial Derivatives: What are They? – Housing Bubble Collapse – Unregulated Insurance
Was the lack of regulation on financial derivatives the main cause of our economic collapse? Or was it the easy money that Fanny Mae and Freddie Mac were giving out for home mortgages like there was no tomorrow? I would say that it was both, but there were other factors involved as well.
The way I see it is that there was overregulation on one hand, Fanny and Freddie, while on the other hand there was under regulation when it came to these derivatives.
I believe that this economic crisis we find ourselves in can be laid squarely on the shoulders of our federal government. They were the ones, along with the Feds, who made regulations that provided easy money for the taking, which was the cause of the housing bubble, which would have to collapse eventually, that is why they call it a bubble, because it is unsustainable.
I believe it’s good that they are now proposing regulations on these insane casino style derivatives that have no economic value for our country. I just hope that congress does not do what it is famous for, which is to overreact to a problem, and in the process, make it worse.
jbranstetter04
Duration : 0:9:29
“For he that hath, …
“For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath.” Mark 4:25 KJV
It’s Biblical law, who is the hath? who is the hath not? in America and the World, it’s better to be rich. trust me, it’s easier to figure out how to build wealth for yourself and your family than it is to fix the problems with the economy of America. Understand the Federal Reserve controls the money, I would like to know who controls this private organization?
Well this is a very …
Well this is a very clear explanation on that one side of derivatives. Who knows what other derivatives are going to blow up for someone in the future. That said derivatives can be used to improve the economy but they can also be abused. Just like many other things in life such as cars, guns and knives, they are all useful but can also be dangerous.
Incredibly naive …
Incredibly naive explanation of derivatives, one sided and completely lacking in substance. I can’t believe he is a prof., risks are usually hedged to within a small percentile range. The actions of one mismanaged company should not be used to explain the entire industry. Imagine we did that with everything, America would be filled with GW Bush’s! Think about it…and do your own research.