The regulations governing capital requirements and collateral must be made much tighter than they previously were.

Even so, I think derivatives are a bad idea.

I remember listening to a discussion of derivatives on public radio back when they were first concocted and wondering about the safety of financial instruments that have no intrinsic value, only the value people apply to them based on their expectations of what they might be worth in the future.

It amounts to little more than a naked bet.

As time went by and the concept survived, I could never quite understand how they ever gained acceptance by the financial community.

Even now, after the Great American Debacle, the financial community still embraces them.

Go figure.

There must be something in it for the financial community because their is nothing in it for me except the risk that they might bet really big and be so wrong that I’ll be expected to help them cover the bet.