9.25.2008

Thursday miscellanea

Kathee and I attended a company breakfast this morning where our company President spoke. Because it was a United Way / Community Support event, the economy was not his topic. But he did briefly touch on the state of the economy. He said that the current national financial situation was the worst in our lifetimes.

I sat next to a financial guy during breakfast and he tried to explain Financial Derivatives. I can't say I understand them even after his explanation.

We have a three day weekend and I am really ready for this.

My head is still spinning about economic events. I do not clearly understand all that is going on. It concerns me that we are bailing out company after company. It strikes me me as corporate socialism. I fear that our future is for a dramatically declining dollar, increasing oil prices, and inflation.

Buffett: `Economic Pearl Harbor'

1 comment:

  1. Not that difficult to understand, really. A derivative is simply a contract that specifies the purchase, sale, or transfer of an asset at a given time with given conditions and prices.

    The Wiki article does a pretty bad job of explaining them, to be sure. Gary North reported a while back that the total value of derivative contracts is north of $285 trillion worldwide, probably about twice the value of all assets on the planet.

    The take-away? Lots of people make their living writing contracts for massive amounts of assets to be bought/sold/whatever at a future date, and the sheer volume of derivatives would suggest that there is a big market in contracts for contracts on contracts.....

    ....as if there isn't enough real work to be done in this world!

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