Derivatives explained
Video Statistics and Information
Channel: Marketplace APM
Views: 404,715
Rating: 4.9217272 out of 5
Keywords: Marketplace, whiteboard, derivatives, economics, business, financial crisis, Paddy Hirsch, economy, npr, radio, explainer, Borrow, Spend, Cost, Supply, Demand, Big banks, Put up dough, Stake, Trust fund, Exchange, Barter, Vend, Offer, Auction, Traffic, Unload, Deal, Dump, Hustle, Recession, Austerity, Financial crisis, Thrift, Layoff, Field, Trade, Work, Career, Livelihood, Occupation, Vocation, Commerce, Financial affairs, Money, Accounts, Analysis, News, regulation
Id: m3im-iJdhv4
Channel Id: undefined
Length: 10min 13sec (613 seconds)
Published: Thu Oct 15 2009
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I thought this video was going to be about differential calculus.
I Always upvote educational videos!
This is a great explanation of derivatives.
I am now one step closer to understanding economics. Now just 9,000 more steps to go...
I still don't quite understand what a derivative is.
Hmm so If I understood him correctly, basically the Lehman shock came from the fact that the housing prices dropped so much that they began to lose alot of money on those derivatives because they were betting that the prices would keep going up and they could make money on them, and then like a domino, because they had been trading them around to other people, those trades were also useless/toxic, so in one fell swoop the bottom fell out of the market because no one had the money to pay for the huge drop in prices. That is why the government came in and said, ok well pay for all these toxic "ious" so we can keep it business as usual.
I assume this must be a pretty common phenomenon within the derivatives market but maybe it was the size of the bubble that really took people by surprise. Hopefully its better regulated nowadays so the bubble cant get as big.....
Perfect timing for this to pop up on Reddit. After the $2 billion JPMorgan loss I was really curious how so much could be lost so quickly.