If people are not aware of how the system has changed as described in these interviews, then people might be looking at the system as a continuum from years past. If people make analyses based on what the system used to be, they are likely to make huge mistakes. One example mentioned in the interview is the fairy tale about how the farmers use derivatives to manage their risk. That may have been the prime use of derivatives years ago, but it is only 10% of the derivatives market now. We have to stop thinking of the main purpose of the derivatives market being what is only 10% of the activity now. We have to start thinking about how the current use of derivatives impacts the costs of commodities to the actual consumers of these commodities.
I wish there were some discussion of how Nixon's decision to leave the gold standard and hence uncouple other currencies from the dollar either caused or was coincident with this takeoff in financialization as a percentage of GDP.
Can we finally admit that the money changers re-grouped, refreshed, and made their way back into the temple where they now have more power than Jesus Christ could ever dream of having?
its a good interview - seems tobe taking some time to post all of it . maybe you could do all of it at once? also jay you don't need to keep saying lets clarify this or that - it seems quite clear. we know there is 700 trillion in derivatives .. but like all bookies the banks are not particularly at risk on most of it.
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If people are not aware of how the system has changed as described in these interviews, then people might be looking at the system as a continuum from years past. If people make analyses based on what the system used to be, they are likely to make huge mistakes. One example mentioned in the interview is the fairy tale about how the farmers use derivatives to manage their risk. That may have been the prime use of derivatives years ago, but it is only 10% of the derivatives market now.
We have to stop thinking of the main purpose of the derivatives market being what is only 10% of the activity now. We have to start thinking about how the current use of derivatives impacts the costs of commodities to the actual consumers of these commodities.
There are not enough comments in the section below.
Oh Good Grief... bring back Glass-Steagall Act and bring an end to this madness.
Informative....
I wish there were some discussion of how Nixon's decision to leave the gold standard and hence uncouple other currencies from the dollar either caused or was coincident with this takeoff in financialization as a percentage of GDP.
Can we finally admit that the money changers re-grouped, refreshed, and made their way back into the temple where they now have more power than Jesus Christ could ever dream of having?
its a good interview - seems tobe taking some time to post all of it . maybe you could do all of it at once? also jay you don't need to keep saying lets clarify this or that - it seems quite clear. we know there is 700 trillion in derivatives .. but like all bookies the banks are not particularly at risk on most of it.