You can't ban short futures without banning long futures because there would be no-one to take the other side of the trade. Its not like shares where you buy an asset.
One key factor i use in identifying people who don't know much is when they site the notional value of total derivatives. The reason? Derivatives are firstly a ZERO SUM GAME and secondly mentioning the notional value is almost irrelevant. For the first point, if someone loses x amount in derivatives then someone else makes x amount in derivatives. Secondly, what's the point in mentioning the notional value? If i sell a 100 futures contracts in the Euro and at the same time buy the equivalent amount in the interbank FX dealers market, because i noticed a .0001 penny discrepency in price and my way to make money is arbritage, then the notional value of the derivatives i've entered to may be 7 or 8 figures, but my actually risk is as close to zero as you can get. Arbitrage traders find extremely small discrepencies in price and then take neutral positions in order to take advantage. But since the discrepency is so small, they are forced to take absolutely massive positions. But there is almost zero risk. How does counting the notional value of such positions and then comparing it to income, make any sense whatsoever? edit: i'm sorry, on re-reading the post, he actually used DEBT as collateral for the notional value of derivatives, not income or assets. This makes it even more nonsensicle.
1. Debts can be repudiated or settled for fractions, lessening the impact. 2. Fiat currency, one of the greatest and most successful inventions of mankind. It has allowed undreamed of growth and prosperity for billions. Fiat currencies require a reset every now and then, this is one of those times. Since Fiat currencies are notional (or paper) the reset can be quickly accomplished. Start the presses on the new Dollar. 3. 100% of the countries on earth use Fiat currencies, and will continue to do so. 4. Economic disaster does not equate to social breakdown. Countries can withstand 25% unemployment. So we are in for a period of dislocation, turmoil, false prophets, winners and losers will surface, then dawn comes for the next day. in the meantime , strap in and wear a helmet. damn, i luv forex.......... s
they had $3B of borrowed money from the wall street bankstas of starting capital and were levered 100:1 they lost 500M in one day. a 3% move in the opposite direction and these clowns were toast. a bunch of dumb ass quants. s <object style="height: 390px; width: 640px"><param name="movie" value="http://www.youtube.com/v/xGfXyVtiB1E?version=3&feature=player_detailpage"><param name="allowFullScreen" value="true"><param name="allowScriptAccess" value="always"><embed src="http://www.youtube.com/v/xGfXyVtiB1E?version=3&feature=player_detailpage" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="640" height="360"></object>
Yeah. I read the book "When genius failed". For a while you think what you are doing is risk free, but then .... Btw: About the reset: Should I get more loan then ??