A $600 Trillion Bubble? Lobbyists Swarm Derivatives

WASHINGTON - Assessing the battle to overhaul the nation's financial regulations recently, Jamie Dimon, the chief executive of JPMorgan Chase, left no doubt about the consequences if Congress cracked down on his bank's immense business in derivatives.

Timothy Geithner, center, Treasury secretary, with Senators Blanche Lincoln and Saxby Chambliss of the Agriculture Committee. (Jim Watson/Agence France-Presse - Getty Images)"It will be negative," he said. "Depending on the real detail, it could be $700 million or a couple billion dollars."

With so much money at stake, it is not surprising that more than 1,500 lobbyists, executives, bankers and others have made their way to the Senate committee that on Wednesday will take up legislation to rein in derivatives, the complex securities at the heart of the financial crisis, the billion-dollar bank bailouts and the fraud case filed last week against Goldman Sachs.

The forum for all this attention is not the usual banking and financial services committees, but rather the Senate Agriculture Committee, a group more accustomed to dealing with farm subsidies and national forest boundaries than with the more obscure corners of Wall Street.

http://www.commondreams.org/headline/2010/04/20-0

http://www.indexq.org/economy/gdp.php

Thats how they can be worth many times the entire world's GDP.

(And thats also what makes them so damaging.)

That's nothing but a bet. No shorting, no derivatives, no futures, nothing besides stocks and bonds.

90% of that 'value' is imaginary - it's leveraged against NOTHING.

Any "investment" leveraged beyond 100% is nothing but a gambling bet (as you said), and is no different from the naked shorting that has always been illegal in our market.

It's a gambling bet where the winner depends not on pure chance, but on who is best at rigging the system.

These ethereal products should not exist. Fuck these thieves.

And the value (value) of credit default swaps is something like 60 trillion. We don't need no stinkin regulations!

like to steal it.