I think we should ban credit derivates. In fact, on one occasion they nearly got me killed. But just what are derivates, and why are they so bad? Well… I’ll get to that in a minute.
To keep this post as deriveting (ha!) as possible, I’m going to adopt at least one more bad pun and pop culture references to illustrate my point. I believe there are six major reasons we need to ban credit derivates – and those points are as follows:
- The first is the obvious detriment of counter-party risks.
- The second is that they are a sneaky way to hide credit risks from the markets.
- The third argument will revolve around regulation being good-for-nothing.
- The forth will be an examination of morals (i.e. that thing bankers don’t have) and how credit derivatives play to our worst characteristics.
- My fifth point will focus on how these ‘weapons of mass destruction’ as Warren Buffett refers to them – play a major role in the financialisation of labour and the further commodification of the working class.
- Last but not least… payback. The conglomerates involved in credit derivatives, and let’s look at the big picture here – there are only a few major players in the game – refused. (more…)