Derivatives: How capitalists engage in financial speculation

New York Times Article

It is a very long article, but one that is worth reading, to get an understanding of how the never ending greed of Capitalism works.

Excerpt: "Derivatives can limit the damage from financial miscues and uncertainty, greasing the wheels of commerce. Used unwisely — when greed [JG: Capitalism's First Commandment] and the urge to gamble with borrowed money overtake sensible risk-taking — derivatives can become Wall Street’s version of nitroglycerin.

JG: It is very clear that Alan Greenspan is partly to blame for the current financial meltdown that Wall Street is going through.

Here are a couple more excerpts:

By the beginning of this decade, according to Mr. Frank and Mr. Blinder, Mr. Greenspan resisted suggestions that the Fed use its powers to regulate the mortgage market or to crack down on practices like providing loans to borrowers with little, if any, documentation.

“Greenspan specifically refused to act,” Mr. Frank says. “He had the authority, but he didn’t use it.”