Derivatives issue tomorrow
The House-Senate conference committee on financial reform takes up the derivatives issue tomorrow. Will they adopt the Senate version (which covers 90% of derivatives according to the CFTC) or the House version which is riddled with loopholes and covers only 60% of derivatives trading?
The recession was caused by the drop in real estate values. Derivative contracts were a side show and and not the cause of the problem. In a general sense restricting business is not good for the economy since GDP is derived from private business transactions. A regulation forced drop in business transactions will lead to a drop in GDP.
Hmmmmm…..on the first about causes, no. Retail real estate drop was a trigger, but if that was the only problem then my bet a different scenario. The drive up in prices in a few years was a problem of much bigger proportions, and bundles of unknown and then unknowable quality in any particular bundle.
How is GDP a good measure of gambling wins and losses? Can you tell me what % of GDP is generated by paper?