How is the health of the derivatives market? In particular, can it have any relationships to stock market?
“Health” and “derivatives market” should not even be used in the same sentence together. The mortgage crisis started this ecomonic problem and derivatives will be the death blow to the financial markets. Answer me this: what intrinsic value is behind that $516 trillion bubble? Do you have any idea? Do you know ANYONE who fully understands the derivatives market? I doubt it. The new derivatives bubble was fueled by five key economic and political trends: Sarbanes-Oxley increased corporate disclosures and government oversight Federal Reserve’s cheap money policies created the subprime-housing boom War budgets burdened the U.S. Treasury and future entitlements programs Trade deficits with China and others destroyed the value of the U.S. dollar Oil and commodity rich nations demanding equity payments rather than debt let’s put that $516 trillion in the context of some other domestic and international monetary data: U.S. annual gross domestic product is about $15 trillion U.S. money supply
