Finance & Fury Podcast

Welcome to Finance and Fury, the Furious Friday edition. This episode – will be looking at derivative disasters through in the history – looking at specific crashes of near financial disasters – that were contained Specifically – Look at a few examples in Australia –ones that most people wouldn’t have heard about – been studying derivatives and the legislative side to them over the past few weeks – came across cases that I had never heard of – wanted to share this and help to demonstrate how these instruments when misused can create a fragile financial system   To start with - Financial derivatives are powerful instruments Mainly because of their capacity to operate with a high degree of leverage -Therefore a small change in underlying prices of the assets that they are written on can lead to dramatic profits – but also losses Due to counter party risks – i.e. the other person that you enter these contracts into with – ones gains can be another loss – and when the loss comes due – the counter party can come