Derivatives Trading Soars to $370 Trillion, BIS Says
How far away are we from reality? Don't worry about it, because the numbers don't mean anything anymore. HA!
This derivatives game is like trying to build a skyscraper out of playing cards. As long as the wind doesn't blow, and the ground doesn't move and you have a very steady hand, maybe that makes sense. Or, not so much:
The use of derivatives grew at the fastest pace in eight years during the first half of 2006, boosting earnings at securities firms and reducing costs for investors.
The face value of derivatives based on corporate bonds, currencies, interest rates, commodities and stocks jumped 24 percent to $370 trillion, according to the Bank for International Settlements. It was the biggest percentage rise since the bank began keeping records in 1998.
Trading in credit-default swaps, the fastest-growing derivatives market, helped spur record earnings for banks including New York-based Morgan Stanley and Goldman Sachs Group Inc. At London-based Barclays Capital derivatives accounted for more than 60 percent of revenue and profit, Chief Executive Officer Bob Diamond said in May.
Topic: Messed up "derivatives" trading (Read 933 times)