Why The Stock Market Is Rising

[TyroneSlothrop]

 

[ralfy]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

 

[Darkwind]

[
Since you don't know basic bookkeeping who are you to run your ignorant mouth?

Free cash flow is just that.

Profit is revenues from operations minus expenses before taxes.

net profit is what is left after taxes

Except for dividends, interest and rents there are no revenues from a financial asset portfolio which are then a net minus transaction and management expenses. For example if you rent out the family farm the rent is revenue. The rental agent's cut is an expense as is maintenance.

Net worth is cash.

Net worth is cash.


No it isn't. Not even close. Idiot.

Wow....

 

[Toddsterpatriot]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

What?

 

[william the wie]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

What?

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

What?

If all derivatives are counted as separate even when they are two sides of the same trade, hedging strategies are ignored and even the plainest vanilla derivatives are also considered it is possibly correct in the sense that your credit/debit card is a derivative, which it most certainly is.

 

[Zander]

Good economic news? Stocks rise.

Bad economic news? Stocks rise.

What could go wrong?

 

[william the wie]

Good economic news? Stocks rise.

Bad economic news? Stocks rise.

What could go wrong?

exactly right.

 

[ralfy]

What?

Credit has been easy to create, and the stock markets are part of it.

 

[ralfy]

If all derivatives are counted as separate even when they are two sides of the same trade, hedging strategies are ignored and even the plainest vanilla derivatives are also considered it is possibly correct in the sense that your credit/debit card is a derivative, which it most certainly is.

Even money is part of it.

 

[Toddsterpatriot]

What?

Credit has been easy to create, and the stock markets are part of it.

That hasn't changed in a long time. So what?

 

[william the wie]

What?

Credit has been easy to create, and the stock markets are part of it.

That hasn't changed in a long time. So what?

money has to go somewhere including the market

 

[AdvancingTime]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

 

[william the wie]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
[URL='http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html[/QUOTE']http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html[/URL]

Since the majority of the money supply even when narrowly defined is in the form of derivatives I find it quite likely that the 693 T is quite minimal. At a risk adjusted interest rate of 3% it would take 2.5 Quadrillion in derivatives to support a world economy of 70T. For example each piece of rental property generally has at least three derivatives with four or more not at all uncommon. Similar results are found in transportation, utilities and even to some extent in retail. So, first derivatives have to be defined in way that separates plain vanilla stuff like your debit card from Forex options.

 

[ralfy]

What?

Credit has been easy to create, and the stock markets are part of it.

That hasn't changed in a long time. So what?

It started changing during the early 1980s.

 

[ralfy]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

Since the majority of the money supply even when narrowly defined is in the form of derivatives I find it quite likely that the 693 T is quite minimal. At a risk adjusted interest rate of 3% it would take 2.5 Quadrillion in derivatives to support a world economy of 70T. For example each piece of rental property generally has at least three derivatives with four or more not at all uncommon. Similar results are found in transportation, utilities and even to some extent in retail. So, first derivatives have to be defined in way that separates plain vanilla stuff like your debit card from Forex options.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T.

 

[william the wie]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

Since the majority of the money supply even when narrowly defined is in the form of derivatives I find it quite likely that the 693 T is quite minimal. At a risk adjusted interest rate of 3% it would take 2.5 Quadrillion in derivatives to support a world economy of 70T. For example each piece of rental property generally has at least three derivatives with four or more not at all uncommon. Similar results are found in transportation, utilities and even to some extent in retail. So, first derivatives have to be defined in way that separates plain vanilla stuff like your debit card from Forex options.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T.

Again that is lowball. GDP is return on investment. Divide GDP by the discounting rate usually the 10 year treasury and multiply by the average number of counterparties which is always two or greater. I this case the minimum number of derivative contract claims would be 1.5-2 quad. For every buyer there must be a seller and except in some cases of currency purchase a rwo or more party derivative is created.

 

[Toddsterpatriot]

What?

Credit has been easy to create, and the stock markets are part of it.

That hasn't changed in a long time. So what?

It started changing during the early 1980s.

It started changing during the early 1980s.

How do you feel it changed? Be specific.
Why does it matter?

 

[Toddsterpatriot]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

Since the majority of the money supply even when narrowly defined is in the form of derivatives I find it quite likely that the 693 T is quite minimal. At a risk adjusted interest rate of 3% it would take 2.5 Quadrillion in derivatives to support a world economy of 70T. For example each piece of rental property generally has at least three derivatives with four or more not at all uncommon. Similar results are found in transportation, utilities and even to some extent in retail. So, first derivatives have to be defined in way that separates plain vanilla stuff like your debit card from Forex options.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T

I made a $5 bet on a hockey game.
My derivative was based on hundreds of millions in value, which is much more than my personal GDP.
If I lose, do I have to default on anything?

 

[william the wie]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

Since the majority of the money supply even when narrowly defined is in the form of derivatives I find it quite likely that the 693 T is quite minimal. At a risk adjusted interest rate of 3% it would take 2.5 Quadrillion in derivatives to support a world economy of 70T. For example each piece of rental property generally has at least three derivatives with four or more not at all uncommon. Similar results are found in transportation, utilities and even to some extent in retail. So, first derivatives have to be defined in way that separates plain vanilla stuff like your debit card from Forex options.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T

I made a $5 bet on a hockey game.
My derivative was based on hundreds of millions in value, which is much more than my personal GDP.
If I lose, do I have to default on anything?

Reread your sig.

 

[ralfy]

...because much of credit is commercially created and not regulated, including derivatives:

Top Derivatives Expert Estimates Size of the Global Derivatives Market at 1 200 Trillion Dollars ... 20 Times Larger than the Global Economy Washington s Blog

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

A great deal of the shadow banking world falls into and overlaps into the grey world of derivatives. There is no single commonly adopted definition of derivative or derivative contract in the European Union. This plays havoc with what and when reporting rules apply. It also highlights divisions in how national regulators view reporting rules for the $693 trillion over-the-counter derivatives market.

Remember this is only part of a much larger market that includes hundreds of trillions of dollars in non-reported agreements and private contracts. The article below explores some of the ins and outs including the risk derivatives pose and why they could collapse the economic system.
http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

Since the majority of the money supply even when narrowly defined is in the form of derivatives I find it quite likely that the 693 T is quite minimal. At a risk adjusted interest rate of 3% it would take 2.5 Quadrillion in derivatives to support a world economy of 70T. For example each piece of rental property generally has at least three derivatives with four or more not at all uncommon. Similar results are found in transportation, utilities and even to some extent in retail. So, first derivatives have to be defined in way that separates plain vanilla stuff like your debit card from Forex options.

From what I remember, in 2000, global GDP was around 30T but derivative levels were around 100T.

Again that is lowball. GDP is return on investment. Divide GDP by the discounting rate usually the 10 year treasury and multiply by the average number of counterparties which is always two or greater. I this case the minimum number of derivative contract claims would be 1.5-2 quad. For every buyer there must be a seller and except in some cases of currency purchase a rwo or more party derivative is created.

It is highly unlikely that GDP is ROI of unregulated derivatives, which explains why global GDP was around 30T in 2000 with derivative levels at 100T, and now GDP at around 70T but derivative levels at 600T to 1.2Q.

Given that, it is more likely that derivatives operate independently of GDP.

More important is the point that fallout from only a fraction of that financial speculation was enough to bring the world to its knees.