I, uh, wow… link? (I know basically nothing about the financial system.)
This gets confusing quickly, and my comment is an oversimplification, but: http://www.slate.com/articles/news_and_politics/explainer/2008/10/596_trillion.html
So essentially, any movement in the money markets is amplified by a factor of about 5?
I’m not an economist, but this basically seems like a good idea, if we assume that the average direction of the market is up.
Jaibot may be referring to instruments like Credit Default Swaps
I’m not implying that is the only type of instrument Jaibot means, but it is definitely seems like an example of money in the financial system which is invested in bets on what happens in the financial system.
Edit: Fixed link again
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I, uh, wow… link? (I know basically nothing about the financial system.)
This gets confusing quickly, and my comment is an oversimplification, but: http://www.slate.com/articles/news_and_politics/explainer/2008/10/596_trillion.html
So essentially, any movement in the money markets is amplified by a factor of about 5?
I’m not an economist, but this basically seems like a good idea, if we assume that the average direction of the market is up.
Jaibot may be referring to instruments like Credit Default Swaps
I’m not implying that is the only type of instrument Jaibot means, but it is definitely seems like an example of money in the financial system which is invested in bets on what happens in the financial system.
Edit: Fixed link again