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<p>[QUOTE=&quot;medoraman, post: 1728497, member: 26302&quot;]First, you are making a personal observation and equating that to the whole country. I see jobs booming, housing booming, where I live. Maybe you are living in an economically depressed area? I see profit reports from companies going up. I see their balance sheets ballooning with cash. That is why I am saying stocks are going up. If you are right, why didn&#039;t stocks go up for the whole period of QE? If there is such a direct reaction, why did it not happen earlier?</p><p><br /></p><p>Second, my MBA specialty was derivative Finance. I think I &quot;grasp&quot; it sir. I think you are the one not understanding a single asset can be involved hundreds of times because the asset doesn&#039;t matter. You are the one not really grasping how its a zero net game, and its being used for the most part for legitimate purposes. The sum value, though, balloons highly because of the way the accountants account for them. If I wish to hedge something, I buy a future. If I no longer need to hedge, I sell the future. To me, I have no derivative. However, to accountants, I own two. Multiply this simple example by millions upon millions of transactions, and you quickly see how very illusory this number is. A very large percentage of these are &quot;made up&quot; numbers because of the way its accounted for.</p><p><br /></p><p>That is why I am saying its not a big deal, and not worth basing your investment life upon. Should you buy companies that play deriviatives? I wouldn&#039;t, but it doesn&#039;t mean that the derivative number bandied about by market bears is overly worrisome.</p><p><br /></p><p>Btw, point taken. I will attempt to not portray you are a fear mongerer. My only problem is that sometimes you make their exact arguments they are making to you back on this board. I do realize, though, that you are not the one trying to profit from those arguments.[/QUOTE]</p><p><br /></p>

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