Please watch the following Videos. If you have problems following them, just imagine how difficult it is to understand the Financial Derivative Marketplace. Remember that you will be watching the beginning betting practices and disciplines of a relatively ‘simple’ street game.
We’re not playing Yahtzee, we’re playing Craps!
Here you can see the Sliding Line as it travels on the Graphic Representation of a single Trigonometric Function. The Derivative in Calculus is the Slope of the Tangent Line at any point on the Original Function usually given by a simple Linear Equation, y=mx+b for those who remember their Algebra or Introduction to Advanced Mathematics. Regardless, the Tangential Line derives its value by its position on the Function without which it would have no value. Such are Derivatives in the Financial Market Place. They have no real value and are only given by complex formulas and the Future Value of the Asset to which it is linked.
Here you can see the Relative Gross Domestic Products of the Ten Leading Global Economies in 2010 in Millions of Dollars ($USD). The Derivative Market in 1995-6 when Brooksley Born was issuing her warning was $27,000,000,000,000.00. That is 27 Trillion Dollars, with a T. The Derivative Market exploded to over $625,000,000,000,000.00, Six Hundred Twenty Five Trillion Dollars in 2007-8. What percentage of the Derivative Market is the GDP of the United States? 2.3%.
I rest my case (for now).
By the way, that is Marilyn Monroe sitting at a Crap Table.