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<p>[QUOTE=&quot;desertgem, post: 2209218, member: 15199&quot;]In my opinion I do not feel that a full understanding is demonstrated of derivatives by the above posts, including the original. Derivatives are similar to options and contracts as they are suppose to have party-counterparty offset, so the end point is zero. Most of them function well as financial instruments. There are some ( not all by any means) who feel that Credit Default Swaps CDS (s) , traded in the over the counter derivatives markets, and the Mortgage Backed Securities MBS (s) a type of securitized debt swap caused the financial breakdown in 2007-10, but it wasn&#039;t the instruments themselves ( like saying gold caused Greece to fail), but the fact that the government was afraid large bank failures due to the offset of the balance and loose regulations would cause a greater financial disaster ( many bullionists would have probably cheered this on) than temporarily bailing out such institutions and changing the regulations. My thought is that the bail out was necessary or the whole world ( the US was not the only country involved in the risk play) would be in much worse financial trouble than it currently is.</p><p>&nbsp;&nbsp; The trouble with the first post is that all derivative markets are clumped together, including options, contracts, ETFs , etc. , most of which function properly. Today there are higher capital standards ( margins) , more international checks and management, and many other regulations built and realigned as to demands of capital.</p><p>&nbsp;&nbsp;&nbsp; Believe it if it makes you feel better, but one does need to know about derivatives, as they are not &quot;absurdly complex&quot; nor a cause for such alarm.[/QUOTE]</p><p><br /></p>

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