Gambling on Derivatives：赌博对衍生物.docVIP

Gambling on Derivatives Hedging Risk or Courting Disaster? It could rip your guts out overnight ... the biggest, most potentially lucrative, and destructive market in the world . Into the Fire by Linda Davies. In no circumstances enter the derivatives trading market without first agreeing it in writing with me ... at some time in the future it could bring the worlds financial system to its knees. Sir Julian Hodge Memo, dated November 1990, to senior executives of the Cardiff-based Julian Hodge Bank, quoted in the Western Mail, Tuesday, February 28 1995. We view them as time bombs both for the parties that deal in them and the economic system ... In our view ... derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal. Warren Buffett The worlds greatest stock market investor, known as the Sage of Omaha, in his Chairmans Letter in the Berkshire Hathaway 2002 Annual Report. Unlike Warren Buffet, Sir Julian Hodge, the Welsh banker, issued his apocalyptic warning three years before the first rash of derivatives disasters involving Metallgesellschaft, Orange County, Sears Roebuck, Proctor Gamble, happened in 1994. More was to come in 1995 in the form of the Daiwa and Barings scandals. None of those on their own, however, threatened to bring the world financial system to its knees. The crisis that came closest to doing so, so far, involved LTCM in September 1998, but could a mega-catastrophe lie around the corner ...? ? Financial Derivatives Timeline 12th Century In European trade fairs sellers sign contracts promising future delivery of the items they sold. What are Derivatives? Derivatives are financial instruments that have no intrinsic value, but derive their value from something else. They hedge the risk of owning things that are subject to unexpected price fluctuations, e.g. foreign currencies, bushels of wheat, stocks and government bonds. There are two main types: futures, or contracts for