An Explanation? For the layperson?

[Fyrenza]

Not to seem like too much of a dumbass, but i'd rather not have to go back through all my old textbooks... :o

Could someone please explain this whole Bail-Out/Depression/Doom and Gloom thing to me,

in layman's terms, that anyone could understand?

i think maybe that's part of why no one really feels any immediate danger nor concern ~

we really don't have the faintest idea what it's all about, and no one is offering any crash courses in the basics of economics...

It's a hell of a request, i know, but THANK YOU, in advance, for ANY effort you're willing to put forth to help out us poor, down-trodden, UNeconomics-savvy folks! :rofl:

[hippiehillbilly]

ok you asked for it.. :rolleyes:

to truly understand it,your gonna have to do some reading..;)

the best compilation on whats going on in financial terms i know of is this series of articles..

The world according to derivatives, part 1 of 7: Irrational exuberance creates global mayhem and mountains of taxpayer debt (http://onlinejournal.com/artman/publish/article_3802.shtml)

The world according to derivatives, part 2 of 7: A Faustian bargain (http://onlinejournal.com/artman/publish/article_3833.shtml)

The world according to derivatives, part 3 of 7: The global casino, currency devaluation and giant fire sales (http://onlinejournal.com/artman/publish/article_3862.shtml)

The world according to derivatives, part 4 of 7: History repeats as the off-balance sheet money supply explodes, then contracts (http://onlinejournal.com/artman/publish/article_3922.shtml)

The world according to derivatives, part 5 of 7: The dark side of global credit system redesign (http://onlinejournal.com/artman/publish/article_3974.shtml)

The world according to derivatives, part 6 of 7: Den of thieves, house of cards (http://onlinejournal.com/artman/publish/article_4031.shtml)

The world according to derivatives, part 7 of 7: The place where industry, the military and government converge (http://onlinejournal.com/artman/publish/article_4307.shtml)

its a LOT to read,but its one of the most detailed set of articles i know of..

and if i can understand them,im sure you can as well..;)

but yea,,bottom line,derivatives is what its all about and why it cant be fixed..

[bluesafire]

thanks HHB, I'd like to read those as well.

[hippiehillbilly]

here ya go, nothing like a few statistics to put it all in perspective.


The Size of Derivatives Bubble = $190K Per Person on Planet :eek: (http://www.siliconvalleywatcher.com/mt/archives/2008/10/the_size_of_der.php)


By Tom Foremski - October 16, 2008
More must read financial analysis from DK Matai, Chairman of the ACTA Open. The Invisible One Quadrillion Dollar Equation -- Asymmetric Leverage and Systemic Risk According to various distinguished sources including the Bank for International Settlements (BIS) in Basel, Switzerland -- the central bankers' bank -- the amount of outstanding derivatives worldwide as of December 2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories of the USD 1.144 Quadrillion derivatives market were the following:
1. Listed credit derivatives stood at USD 548 trillion;
2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:
a. Interest Rate Derivatives at about USD 393+ trillion;
b. Credit Default Swaps at about USD 58+ trillion;
c. Foreign Exchange Derivatives at about USD 56+ trillion;
d. Commodity Derivatives at about USD 9 trillion;
e. Equity Linked Derivatives at about USD 8.5 trillion; and
f. Unallocated Derivatives at about USD 71+ trillion.


Quadrillion? That is a number only super computing engineers and astronomers used to use, not economists and bankers! For example, the North star is "just" a couple of quadrillion miles away, ie, a few thousand trillion miles. The new "Roadrunner" supercomputer built by IBM for the US Department of Energy's Los Alamos National Laboratory has achieved a peak performance of 1.026 Peta Flop per second -- becoming the first supercomputer ever to reach this milestone. One Quadrillion Floating Point Operations (Flops) per second is 1 Peta Flop/s, ie, 1,000 Trillion Flops per second. It is estimated that all the data found on all the websites and stored on computers across the world totals more than One Exa byte of memory, ie, 1,000 Quadrillion bytes of data.


Whilst outstanding derivatives are notional amounts until they are crystallised, actual exposure is measured by the net credit equivalent. This is normally a lower figure unless many variables plot a locus in the wrong direction simultaneously. This could be because of catastrophic unpredictable events, ie, "Black Swans", such as cascades of bankruptcies and nationalisations, when the net exposure can balloon and become considerably larger or indeed because some extremely dislocating geo-political or geo-physical events take place simultaneously. Also, the notional value becomes real value when either counterparty to the OTC derivative goes bankrupt. This means that no large OTC derivative house can be allowed to go broke without falling into the arms of another. Whatever funds within reason are required to rescue failing international investment banks, deposit banks and financial entities ought to be provided on a case by case basis. This is the asymmetric nature of derivatives and here lies the potential for systemic risk to the global economic system and financial markets if nothing is done.
Let us think about the invisible USD 1.144 quadrillion equation with black swan variables -- ie, 1,144 trillion dollars in terms of outstanding derivatives, global Gross Domestic Product (GDP), real estate, world stock and bond markets coupled with unknown unknowns or "Black Swans". What would be the relative positioning of USD 1.144 quadrillion for outstanding derivatives, ie, what is their scale:
1. The entire GDP of the US is about USD 14 trillion.
2. The entire US money supply is also about USD 15 trillion.
3. The GDP of the entire world is USD 50 trillion. USD 1,144 trillion is 22 times the GDP of the whole world.
4. The real estate of the entire world is valued at about USD 75 trillion.
5. The world stock and bond markets are valued at about USD 100 trillion.
6. The big banks alone own about USD 140 trillion in derivatives.
7. Bear Stearns had USD 13+ trillion in derivatives and went bankrupt in March. Freddie Mac, Fannie Mae, Lehman Brothers and AIG have all 'collapsed' because of complex securities and derivatives exposures in September.
8. The population of the whole planet is about 6 billion people. So the derivatives market alone represents about USD 190,000 per person on the planet.

[hippiehillbilly]

what a derivative is.

What is a derivative? (http://www.cashbazar.com/investing/what-is-a-derivative.shtml)

By Jakob Jelling
Cashbazar.com (http://www.cashbazar.com/)
Invest in commodities without buying the commodities themselves.
Another vehicle that is available for your investments is a derivative. These are a type of investment instrument that will allow you to invest in one or more securities in different ways. Basically, when you decide to put your money into a particular commodity, you have several choices as to the way in which your money will be invested. Derivatives might be based on the value of whichever commodity is underlying them, but the investments regarding them will be different depending on the type of derivative you have invested in.

Derivatives are traditionally forwards, options, futures, and swaps. These different types of derivatives have different rules regarding them, so you should make sure that you know exactly how the derivative you're thinking about buying will work. For example, futures are a type of derivative in which the two people who are involved in the futures trade are not actually trading anything at the time that the derivative is traded. Instead, the two people agree to make a trade at a particular date in the future.

Options are a type of derivative in which the two people decide that at some point in the future, they will have the option of making a particular trade. These options do not mean that the trade is required at that particular point of time. If the buyer decides that he or she does not want to take the option at that time, then they simply don't.

There are several different types of options as well, so you should make sure that you find out which option you are going to purchase before you accidentally buy one with restrictions that will be in your way.

Derivatives were originally designed so that the market can be protected against rapid price changes. Therefore, buying derivatives and watching that side of the market may help the economy keep from fluctuating.

The most important thing to remember about derivatives, however, is that most of them are not actual purchases. In most cases, the parties involved are only agreeing to make a trade in the future. In the case of options, however, it is possible that the trade will not be completed after all.
------------------------------------------------------------------------
my comment,,
this is whats happening. all the trades that were agreed to be made are now coming due.. there was never any money,only constant trading of derivatives to give the illusion of wealth..

[White_Horse_Mescalito]

in layman's terms, that anyone could understand?


pay off for Bushies friends !!

[hippiehillbilly]

ok yeah, thats what is causing the global financial meltdown..

your not a brain surgeon are you?

[Pressed_Rat]

I am going to make it simple. It does not require being an expert in economics, as most of what economics teaches is bullshit aimed more at obscuring the true operations of the banking system.

1) The current crisis was deliberately engineered. It didn't happen overnight, but over a prolonged period of time.

2) Why? Because you must always create the CRISIS to then pose as savior and offer the so-called "solution," which isn't really a solution at all and only sets the stage for the next BIGGER crisis, which entails the same move forward of the agenda under the guise of yet another, more radical "solution." This "solution" always results in a further centralization of power in the hands of the government (which is controlled by the bankers and corporate elite) and a loss of power and freedoms for the people. This is the Hegelian Dialectic at work.

The global elite are after a one world government with a one world currency, under a centralized global banking institution. In order for them to offer global governance as the solution to all the world's problems , they must create these problems which provide the apparent justification for the so-called solution.

3) This economic crisis was created by the central bankers of the Federal Reserve -- whose banks are PRIVATE institutions -- printing vast amounts of money that contain ZERO backing in any commodity. For years this run away printing of money went along with artificially low interest rates. This is served to create massive amounts of debt and a steady devaluation of the dollar. This eventually leads to bubbles which are merely SYMPTOMS of the much bigger problem.

4) The bailout/stimulus is not intended to fix anything, but rather move us into the next phase of HYPERINFLATION, which will be when the real chaos ensues. These people are ultimately after the complete destruction of the dollar, so they can then offer their "solution" of a regional and/or global currency, which is one of the biggest building blocks to a world government. The bailout/stimulus will turn the recession into a full-blown depression that will be ten times worse than the depression of the 1930s (which too was engineered).

[hippiehillbilly]

well of course the derivatives bubble was allowed to happen,thus engineered.

and the bailout,stimulus and whatever else they wanna do to create the illusion of fixing things CANT fix anything.. the numbers dont lie..

they could never print enough money,nor shuffle enough papers to wipe away a quadrillion dollars worth of empty wealth derived through a promise and a handshake.

[White_Horse_Mescalito]

yeah.. by bush and his cronies

[hippiehillbilly]

yeah.. by bush and his cronies

bush was just a puppet,same as obama is. this is global.designed and orchestrated by the global elite. until you understand its global you understand nothing..


keep drinkin that kool aid..http://www.endtimesroundtable.com/phpBB3/images/smilies/sheepaid.gif

[White_Horse_Mescalito]

okay who then .. who are the global elite.. I want names

othewise.. it's Bush and Cheney

[hippiehillbilly]

okay who then .. who are the global elite.. I want names

othewise.. it's Bush and Cheney

lol.. well here are just a few involved in this fiasco..

as you see.its global..yes they were involved,but only doing what they were told.

List of Bilderberg 2008 Attendees - Globalists Exposed (http://illegalprotest.com/2008/06/08/list-of-bilderberg-2008-attendees-globalists-exposed/)


BEL Davignon, Etienne Vice Chairman, Suez-Tractebel DEU Ackermann, Josef Chairman of the Management Board and the Group Executive Committee, Deutsche Bank AG
CAN Adams, John Associate Deputy Minister of National Defence and Chief of the Communications Security Establishment Canada
USA Ajami, Fouad Director, Middle East Studies Program, The Paul H. Nitze School of Advanced International Studies, The Johns Hopkins University
USA Alexander, Keith B. Director, National Security Agency
INT Almunia, Joaqui’n Commissioner, European Commission
GRC Alogoskoufis, George Minister of Economy and Finance
USA Altman, Roger C. Chairman, Evercore Partners Inc.
TUR Babacan, Ali Minister of Foreign Affairs
NLD Balkenende, Jan Peter Prime Minister
PRT Balsemão, Francisco Pinto Chairman and CEO, IMPRESA, S.G.P.S.; Former Prime Minister
FRA Baverez, Nicolas Partner, Gibson, Dunn & Crutcher LLP
ITA Bernabé, Franco CEO, Telecom Italia Spa
USA Bernanke, Ben S. Chairman, Board of Governors, Federal Reserve System
SWE Bildt, Carl Minister of Foreign Affairs
FIN Blåfield, Antti Senior Editorial Writer, Helsingin Sanomat
DNK Bosse, Stine CEO, TrygVesta
CAN Brodie, Ian Chief of Staff, Prime Minister’s Office
AUT Bronner, Oscar Publisher and Editor, Der Standard
FRA Castries, Henri de Chairman of the Management Board and CEO, AXA
ESP Cebrián, Juan Luis CEO, PRISA
CAN Clark, Edmund President and CEO, TD Bank Financial Group
GBR Clarke, Kenneth Member of Parliament
NOR Clemet, Kristin Managing Director, Civita
USA Collins, Timothy C. Senior Managing Director and CEO, Ripplewood Holdings, LLC
FRA Collomb, Bertrand Honorary Chairman, Lafarge
PRT Costa, António Mayor of Lisbon
USA Crocker, Chester A. James R. Schlesinger Professor of Strategic Studies
USA Daschle, Thomas A. Former US Senator and Senate Majority Leader
CAN Desmarais, Jr., Paul Chairman and co-CEO, Power Corporation of Canada
GRC Diamantopoulou, Anna Member of Parliament
USA Donilon, Thomas E. Partner, O’Melveny & Myers
ITA Draghi, Mario Governor, Banca d’Italia
AUT Ederer, Brigitte CEO, Siemens AG Österreich
CAN Edwards, N. Murray Vice Chairman, Candian Natural Resources Limited
DNK Eldrup, Anders President, DONG A/S
ITA Elkann, John Vice Chairman, Fiat S.p.A.
USA Farah, Martha J. Director, Center for Cognitive Neuroscience;
Walter H. Annenberg Professor in the Natural Sciences, University of Pennsylvania
USA Feldstein, Martin S. President and CEO, National Bureau of Economic Research
DEU Fischer, Joschka Former Minister of Foreign Affairs
USA Ford, Jr., Harold E. Vice Chairman, Merill Lynch & Co., Inc.
CHE Forstmoser, Peter Professor for Civil, Corporation and Capital Markets Law, University of Zürich
IRL Gallagher, Paul Attorney General
USA Geithner, Timothy F. President and CEO, Federal Reserve Bank of New York
USA Gigot, Paul Editorial Page Editor, The Wall Street Journal
IRL Gleeson, Dermot Chairman, AIB Group
NLD Goddijn, Harold CEO, TomTom
TUR Gögüs, Zeynep Journalist; Founder, EurActiv.com.tr
USA Graham, Donald E. Chairman and CEO, The Washington Post Company
NLD Halberstadt, Victor Professor of Economics, Leiden University; Former Honorary Secretary General of Bilderberg Meetings
USA Holbrooke, Richard C. Vice Chairman, Perseus, LLC
FIN Honkapohja, Seppo Member of the Board, Bank of Finland
INT Hoop Scheffer, Jaap G. de Secretary General, NATO
USA Hubbard, Allan B. Chairman, E & A Industries, Inc.
BEL Huyghebaert, Jan Chairman of the Board of Directors, KBC Group
DEU Ischinger, Wolfgang Former Ambassador to the UK and US
USA Jacobs, Kenneth Deputy Chairman, Head of Lazard U.S., Lazard Frères & Co. LLC
USA Johnson, James A. Vice Chairman, Perseus, LLC
SWE Johnstone, Tom President and CEO, AB SKF
USA Jordan, Jr., Vernon E. Senior Managing Director, Lazard Frères & Co. LLC
FRA Jouyet, Jean-Pierre Minister of European Affairs
GBR Kerr, John Member, House of Lords; Deputy Chairman, Royal Dutch Shell plc.
USA Kissinger, Henry A. Chairman, Kissinger Associates, Inc.
DEU Klaeden, Eckart von Foreign Policy Spokesman, CDU/CSU
USA Kleinfeld, Klaus President and COO, Alcoa
TUR Koç, Mustafa Chairman, Koç Holding A.S.
FRA Kodmani, Bassma Director, Arab Reform Initiative
USA Kravis, Henry R. Founding Partner, Kohlberg Kravis Roberts & Co.
USA Kravis, Marie-Josée Senior Fellow, Hudson Institute, Inc.
INT Kroes, Neelie Commissioner, European Commission
POL Kwasniewski, Aleksander Former President
AUT Leitner, Wolfgang CEO, Andritz AG
ESP León Gross, Bernardino Secretary General, Office of the Prime Minister
INT Mandelson, Peter Commissioner, European Commission
FRA Margerie, Christophe de CEO, Total
CAN Martin, Roger Dean, Joseph L. Rotman School of Management, University of Toronto
HUN Martonyi, János Professor of International Trade Law; Partner, Baker & McKenzie; Former Minister of Foreign Affairs
USA Mathews, Jessica T. President, Carnegie Endowment for International Peace
INT McCreevy, Charlie Commissioner, European Commission
USA McDonough, William J. Vice Chairman and Special Advisor to the Chairman, Merrill Lynch & Co., Inc.
CAN McKenna, Frank Deputy Chair, TD Bank Financial Group
GBR McKillop, Tom Chairman, The Royal Bank of Scotland Group
FRA Montbrial, Thierry de President, French Institute for International Relations
ITA Monti, Mario President, Universita Commerciale Luigi Bocconi
USA Mundie, Craig J. Chief Research and Strategy Officer, Microsoft Corporation
NOR Myklebust, Egil Former Chairman of the Board of Directors SAS, Norsk Hydro ASA
DEU Nass, Matthias Deputy Editor, Die Zeit
NLD Netherlands, H.M. the Queen of the
FRA Ockrent, Christine CEO, French television and radio world service
FIN Ollila, Jorma Chairman, Royal Dutch Shell plc
SWE Olofsson, Maud Minister of Enterprise and Energy; Deputy Prime Minister
NLD Orange, H.R.H. the Prince of
GBR Osborne, George Shadow Chancellor of the Exchequer
TUR Öztrak, Faik Member of Parliament
ITA Padoa-Schioppa, Tommaso Former Minister of Finance; President of Notre Europe
GRC Papahelas, Alexis Journalist, Kathimerini
GRC Papalexopoulos, Dimitris CEO, Titan Cement Co. S.A.
USA Paulson, Jr., Henry M. Secretary of the Treasury
USA Pearl, Frank H. Chairman and CEO, Perseus, LLC
USA Perle, Richard N. Resident Fellow, American Enterprise Institute for Public Policy Research
FRA Pérol, François Deputy General Secretary in charge of Economic Affairs
DEU Perthes, Volker Director, Stiftung Wissenschaft und Politik
BEL Philippe, H.R.H. Prince
CAN Prichard, J. Robert S. President and CEO, Torstar Corporation
CAN Reisman, Heather M. Chair and CEO, Indigo Books & Music Inc.
USA Rice, Condoleezza Secretary of State
PRT Rio, Rui Mayor of Porto
USA Rockefeller, David Former Chairman, Chase Manhattan Bank
ESP Rodriguez Inciarte, Matias Executive Vice Chairman, Grupo Santander
USA Rose, Charlie Producer, Rose Communications
DNK Rose, Flemming Editor, Jyllands Posten
USA Ross, Dennis B. Counselor and Ziegler Distinguished Fellow, The Washington Institute for Near East Policy
USA Rubin, Barnett R. Director of Studies and Senior Fellow, Center for International Cooperation, New York University
TUR Şahenk, Ferit Chairman, Doğuş Holding A.Ş.
USA Sanford, Mark Governor of South Carolina
USA Schmidt, Eric Chairman of the Executive Committee and CEO, Google
AUT Scholten, Rudolf Member of the Board of Executive Directors, Oesterreichische Kontrollbank AG
DNK Schur, Fritz H. Fritz Schur Gruppen
CZE Schwarzenberg, Karel Minister of Foreign Affairs
USA Sebelius, Kathleen Governor of Kansas
USA Shultz, George P. Thomas W. and Susan B. Ford Distinguished Fellow, Hoover Institution, Stanford University
ESP Spain, H.M. the Queen of
CHE Spillmann, Markus Editor-in-Chief and Head Managing Board, Neue Zürcher Zeitung AG
USA Summers, Lawrence H. Charles W. Eliot Professor, Harvard University
GBR Taylor, J. Martin Chairman, Syngenta International AG
USA Thiel, Peter A. President, Clarium Capital Management, LLC
NLD Timmermans, Frans Minister of European Affairs
RUS Trenin, Dmitri V. Deputy Director and Senior Associate, Carnegie Moscow Center
INT Trichet, Jean-Claude President, European Central Bank
USA Vakil, Sanam Assistant Professor of Middle East Studies, The Paul H. Nitze School of Advanced International Studies, Johns Hopkins University
FRA Valls, Manuel Member of Parliament
GRC Varvitsiotis, Thomas Co-Founder and President, V + O Communication
CHE Vasella, Daniel L. Chairman and CEO, Novartis AG
FIN Väyrynen, Raimo Director, The Finnish Institute of International Affairs
FRA Védrine, Hubert Hubert Védrine Conseil
NOR Vollebaek, Knut High Commissioner on National Minorities, OSCE
SWE Wallenberg, Jacob Chairman, Investor AB

[Pressed_Rat]

okay who then .. who are the global elite.. I want names

othewise.. it's Bush and Cheney

Bush, like Bill said, was nothing more than a puppet. It's the same with Obama. These people ultimately run NOTHING. They sit in front of a desk, sign bills they're told to sign, and read of teleprompters when they give speeches. The president is nothing more than a public face -- a figurehead. But these problems go back further than Bush. It's just that with each presidency, we see a progression of the same agenda. It does not change, no matter who is in office.

[hippiehillbilly]

i hate to use this as evidence but i will anyway..:rolleyes:

in one of alex jones documentaries,:eek: yeah yeah,i know,hear me out..:cool:

anyway,they were at the bilderberg meeting in canada,and the arabic looking guy that covers bilderberg said something to the affect of "they said they are going to keep it going till fall of 2008 then let it go" in reference to the economy..that was june 2006.

call it what ya want,i call it a dot.

ill say this,i saw that documentary early 2007 and something told me get ready..all i can say is,im glad i had my tin foil on.

[earthmother]

When I read that thingie about what are derivatives, I kept feeling as if I were reading the instructions to a complex and ridiculous board game...

Gambling, anyone?

[Pressed_Rat]

I was warning people seven years ago of what is happening right now, long before most people had any idea this would happen. Of course I was laughed at and called a "whackjob." I actually said it would happen around 2007, so I have been a bit premature in my estimate.

The reason I knew this would happen isn't because I am an expert in economics -- I am far from that. However, in understanding the problem-reaction-solution scenario, as well as understanding the elite's time-table, it was the only LOGICAL conclusion I could come to. After all, to bring in the new system you must first destroy the old and create the necessary chaos -- and therefore the presumed justification -- to offer the alleged "solution."

All this stuff the economists are saying, even the ones who tell some of the truth (Schiff, Shedlock, Celente, etc.) are ultimately meaningless because this was all done deliberately. It doesn't matter how it was done as much as the fact that it's being done on purpose, which none of the aforementioned names will admit. I even heard Mish Shedlock say on Coast to Coast several months back that we could anticipate a positive change under Obama. So either these people are just naive and do not understand the big picture, or they are deliberately being vague.

[White_Horse_Mescalito]

Now your talking Billy...

shit I'm going to have to make a longer boycott list.... damn I hate it when that happens