Friday Movie Night - Derivatives De' Ride!

hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!   Well, not really this evening.  It is more like time to breath. We need an educational catch up on the real causes of this financial crisis and resulting bail out, which is derivatives (and not falling housing prices per say).

This weeks video clip theme is education on derivatives and credit default swaps (CDS). These vehicles are so complex frankly it's tough to find material which explains them clearly.


Firstly is Thompson Financials on Credit Default Swaps which explains this in a few paragraphs.  Note how this market is estimated at $45 trillion dollars. 


Here is a CNBC tutorial Subprime derivatives:


Next, bionic turtle has a series of educational youtubes, which while dense, are understandable. We owe this person a lot of debt because when you see this next one, not only will you realize just how complex all of these exotic methods of structured finance are, but one can also see the fictional money house of cards.


Collateralized Debt Obligations (CBO)

Did anyone else notice the CDS2? That's right folks a credit default swap of a credit default swap. Now model the effects of all of these things going out of whack at the same time.

Here is one on credit default swaps


An investment group meeting in New York is also lecturing on these exotic debt investment vehicles:

Now, if you really want to get into this, Google has a class lecture that is 3 hours long on Structured Finance.


Credit Risk Management vehicles: