Tim Lamb wrote:
In message , Tim W
writes

It's the ill checked multilayered investments I object to (many of the
subprime packages were basically a ball of ****e dipped in candy and
painted
pretty colours, and the other speculative investments that are
effectively
playing poker.

It is those that should be well and truley decoupled from peoples'
pensions
and savings.

Quite!

Can someone kindly give me an explanation of derivatives? Preferably in
plain English:-)

I think I have grasped the principle of *short selling* and stock lending.


First of all, forget the calculus meaning.


A derivative product is one that does not involve buying or selling the
underlying share, biond, currency etc. but a product DERIVED from it.

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

So is insuring it, in fact.

Derivatives are contracts of a sort, which have value depending on the
underlying value of some actual tradeable element.


Things get confusing when you but shares in e.g. funds that trade in
derivatives..


There's an interesting bit of recursion if a company invests its funds
in derivatives of its own share price.

And in fact, to an extent, a lot of derivatives are in fact of that
sort. So there is massive potential for positive feedback.

This is why they are regarded as leading to excessive volatility -
(think high gain: they amplify small perturbations).


The essence of rogue trading, is that a large financial institution that
takes a bet on an underlying, is supposed to lay that bet off by buying
or selling the underlying, or at least selling bets the other way.

If a trader doesn't do that, he becomes a punter or a bookie with high
exposure.




regards

In message , The Natural Philosopher
writes

Can someone kindly give me an explanation of derivatives? Preferably
in plain English:-)
I think I have grasped the principle of *short selling* and stock
lending.


First of all, forget the calculus meaning.


A derivative product is one that does not involve buying or selling the
underlying share, biond, currency etc. but a product DERIVED from it.

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

So is insuring it, in fact.

Derivatives are contracts of a sort, which have value depending on the
underlying value of some actual tradeable element.


Things get confusing when you but shares in e.g. funds that trade in
derivatives..


There's an interesting bit of recursion if a company invests its funds
in derivatives of its own share price.

And in fact, to an extent, a lot of derivatives are in fact of that
sort. So there is massive potential for positive feedback.

This is why they are regarded as leading to excessive volatility -
(think high gain: they amplify small perturbations).


The essence of rogue trading, is that a large financial institution
that takes a bet on an underlying, is supposed to lay that bet off by
buying or selling the underlying, or at least selling bets the other way.

If a trader doesn't do that, he becomes a punter or a bookie with high
exposure.

Hmm.. Thanks.

I suppose horse racing bets are an accepted fact of life.

Would the world shudder to a halt if derivative trading was regulated?

regards

--
Tim Lamb

Tim Lamb wrote:
In message , The Natural Philosopher
writes

Can someone kindly give me an explanation of derivatives? Preferably
in plain English:-)
I think I have grasped the principle of *short selling* and stock
lending.


First of all, forget the calculus meaning.


A derivative product is one that does not involve buying or selling
the underlying share, biond, currency etc. but a product DERIVED from it.

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

So is insuring it, in fact.

Derivatives are contracts of a sort, which have value depending on the
underlying value of some actual tradeable element.


Things get confusing when you but shares in e.g. funds that trade in
derivatives..


There's an interesting bit of recursion if a company invests its funds
in derivatives of its own share price.

And in fact, to an extent, a lot of derivatives are in fact of that
sort. So there is massive potential for positive feedback.

This is why they are regarded as leading to excessive volatility -
(think high gain: they amplify small perturbations).


The essence of rogue trading, is that a large financial institution
that takes a bet on an underlying, is supposed to lay that bet off by
buying or selling the underlying, or at least selling bets the other way.

If a trader doesn't do that, he becomes a punter or a bookie with high
exposure.

Hmm.. Thanks.

I suppose horse racing bets are an accepted fact of life.

Would the world shudder to a halt if derivative trading was regulated?

Its very much a feature.

Like anything else, it has good sides and bad.

Someone I know took out currency options to protect their (dollar)
salary against a falling dollar, and made more out of those than the
salary! that was a few years back..

In particular people who trade in volatile commodities, like oil and
grain, need to be able to offset really bad years prices with some form
of insurance.

The bad press is when it pure speculation..but hey, there's nothing
wrong with betting on the horse, provided its YOUR money.

What went wrong as the banks, the high street safe as houses banks,
placing one way bets of staggering magnitude on house prices carryig on
rising, on te basis taht the more money they lent, the more the house
prices would ridse.

Not only was it not their money, they also overborrowed, and its cost us
as much again in bail out.

THAT is where regulation is needed. High street boring banks should not
be using customers deposits as place bets at the poker tables.

If they had been e.g. hedge funds, well if you stuff money in a hedge
fund, you have to expect one year in ten you will lose your shirt.

RBS and Lloyds, and so on, SHOULD have been allowed to go bust. They
should have transferred assets of quality to another high street bank,
guaranteed deposits and let the rest crash and burn. Along with their
directors and bonuses.







regards

We were somewhere around Barstow, on the edge of the desert, when the
drugs began to take hold. I remember saying
something like:

In this hypothetical case where disbelievers are _actually_ wrong
(or as close to wrongness as science allows), why should an
interminable _public_ repetition of inaccurate views remain unopposed?
Especially if they keep repeating their nonsense ad nauseum, are
unable to come up with well argued scientific arguments or demonstrate
any technical knowledege -- and persist in misinforming others on a
matter of considerable importance?

Personally, I'm fed up with preaching ******s.

On Thu, 17 Dec 2009 13:45:09 +0000, The Natural Philosopher
wrote:

Tim Lamb wrote:
In message , The Natural Philosopher
writes

Can someone kindly give me an explanation of derivatives? Preferably
in plain English:-)
I think I have grasped the principle of *short selling* and stock
lending.


First of all, forget the calculus meaning.


A derivative product is one that does not involve buying or selling
the underlying share, biond, currency etc. but a product DERIVED from it.

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

So is insuring it, in fact.

Derivatives are contracts of a sort, which have value depending on the
underlying value of some actual tradeable element.


Things get confusing when you but shares in e.g. funds that trade in
derivatives..


There's an interesting bit of recursion if a company invests its funds
in derivatives of its own share price.

And in fact, to an extent, a lot of derivatives are in fact of that
sort. So there is massive potential for positive feedback.

This is why they are regarded as leading to excessive volatility -
(think high gain: they amplify small perturbations).


The essence of rogue trading, is that a large financial institution
that takes a bet on an underlying, is supposed to lay that bet off by
buying or selling the underlying, or at least selling bets the other way.

If a trader doesn't do that, he becomes a punter or a bookie with high
exposure.

Hmm.. Thanks.

I suppose horse racing bets are an accepted fact of life.

Would the world shudder to a halt if derivative trading was regulated?

Its very much a feature.

Like anything else, it has good sides and bad.

Someone I know took out currency options to protect their (dollar)
salary against a falling dollar, and made more out of those than the
salary! that was a few years back..

In particular people who trade in volatile commodities, like oil and
grain, need to be able to offset really bad years prices with some form
of insurance.

The bad press is when it pure speculation..but hey, there's nothing
wrong with betting on the horse, provided its YOUR money.

What went wrong as the banks, the high street safe as houses banks,
placing one way bets of staggering magnitude on house prices carryig on
rising, on te basis taht the more money they lent, the more the house
prices would ridse.

Not only was it not their money, they also overborrowed, and its cost us
as much again in bail out.

THAT is where regulation is needed. High street boring banks should not
be using customers deposits as place bets at the poker tables.

If they had been e.g. hedge funds, well if you stuff money in a hedge
fund, you have to expect one year in ten you will lose your shirt.

RBS and Lloyds, and so on, SHOULD have been allowed to go bust. They
should have transferred assets of quality to another high street bank,
guaranteed deposits and let the rest crash and burn. Along with their
directors and bonuses.

I agree. The shareholders/directors are the ones who should carry the
risk. Public money should not be used to bail out private companies.


--
(\__/) M.
(='.'=) Due to the amount of spam posted via googlegroups and
(")_(") their inaction to the problem. I am blocking most articles
posted from there. If you wish your postings to be seen by
everyone you will need use a different method of posting.
[Reply-to address valid until it is spammed.]

Tim W wrote:
In this hypothetical case where disbelievers are _actually_ wrong
(or as close to wrongness as science allows), why should an
interminable _public_ repetition of inaccurate views remain unopposed?
Especially if they keep repeating their nonsense ad nauseum, are
unable to come up with well argued scientific arguments or demonstrate
any technical knowledege -- and persist in misinforming others on a
matter of considerable importance?

When the Director of the Environment Institute, UCL and a Professor of
Meteorology of MIT cannot agree on whether climate change is man made or
not, then it seems premature to claim one viewpoint is fact.

Ahem: "In this hypothetical case". I was trying to avoid a specific
climate-change angle so as to make a point of principle.

And even if we decide to admit the climate-change case, note that
I used the phrase "as close to wrongness as science allows" --
perhaps a little vague, but "the vast majority of scientists have
scientific grounds to consider you wrong" seemed unwieldy.

Lastly, finding three people disagreeing point of view on topix X is
hardly a triumph -- I could probably find more who disagree on the
nature or definition of the Poynting vector, a far less complex subject
than climate. If you could demonstrate that the climate-science
community had no overall & significant majority one way or another,
that would be worth noting.

#Paul

wibbled on Thursday 17 December 2009 20:45

Tim W wrote:
In this hypothetical case where disbelievers are _actually_ wrong
(or as close to wrongness as science allows), why should an
interminable _public_ repetition of inaccurate views remain unopposed?
Especially if they keep repeating their nonsense ad nauseum, are
unable to come up with well argued scientific arguments or demonstrate
any technical knowledege -- and persist in misinforming others on a
matter of considerable importance?

When the Director of the Environment Institute, UCL and a Professor of
Meteorology of MIT cannot agree on whether climate change is man made or
not, then it seems premature to claim one viewpoint is fact.

Ahem: "In this hypothetical case". I was trying to avoid a specific
climate-change angle so as to make a point of principle.

And even if we decide to admit the climate-change case, note that
I used the phrase "as close to wrongness as science allows" --
perhaps a little vague, but "the vast majority of scientists have
scientific grounds to consider you wrong" seemed unwieldy.

Lastly, finding three people disagreeing point of view on topix X is
hardly a triumph -- I could probably find more who disagree on the
nature or definition of the Poynting vector, a far less complex subject
than climate. If you could demonstrate that the climate-science
community had no overall & significant majority one way or another,
that would be worth noting.

#Paul

Well put argument.

I'm just deeply suspicious because of the political swerve on it and the way
that proponents seem to act in a manner more befitting to religious zealots.

If the whole thing is as clear cut as some would like to believe, I wouldn't
expect to have 2 senior academics from top institutes in the relevant field
holding somewhat dissimilar views.



--
Tim Watts

This space intentionally left blank...

Tim W wrote:

If the whole thing is as clear cut as some would like to believe, I wouldn't
expect to have 2 senior academics from top institutes in the relevant field
holding somewhat dissimilar views.

Lindzen is a Merkin and a self confessed denier. Given the attitude of
the Cheney Administration it is hardly surprising that deniers hold
positions of authority the other side of the pond. And if he wasn't a
denier then the debate wouldn't have been staged.

As Lindzen is a denier it is only to be expected that he pulled a few of
the deniers typical tricks. To single out only 2. The first misleading,
the second downright dishonest as far as I can see.

1."The temperature anomaly for 2008 was not statistically significantly
different from 1987."

Conveniently ignoring the fact that all the other years from 2000
onwards including 2009 are.

2 "And still the conclusion is that no one knows because the changes
argued about would take thousands of years to raise sea levels discernibly."

Funny that those on the other side are predicting sea level rises of
noticeable size by the end of the century and, depending on what exactly
he was on about, are already reporting significant rises in sea level
due to expansion as the seas warm.

John Rumm
wibbled on Thursday 17 December 2009 18:38

Get your own back, train as a lapdancer ;-)


Could I optimise that and just put out his eyes - he's going blind either
way?

--
Tim Watts

This space intentionally left blank...

Tim W wrote:


I'm just deeply suspicious because of the political swerve on it and the way
that
AS well you might: teh problem is to properly understand the scientific
case takes a brain, some education and some training. Not many have that
and precious few in government. Or indeed in many other movements both
for and against..so it boils down to believeable fairy tales and
political and market manoeuverng.

Dr Iain Stewart is doing a far better job of presenting the case on
Channel 4 IIRC. Watch him. He is I feel fair and ubiased.

If the whole thing is as clear cut as some would like to believe, I wouldn't
expect to have 2 senior academics from top institutes in the relevant field
holding somewhat dissimilar views.

Look, its very clear cut at one level, but that doesn't mean that
accurate predictions are possible. With weather, its possible to say
that in general June is warmer than December. OTOH we have had frosts
and snow in June..and it can be very warm in December.

Lets say that the best sort of analogy, is that there is a die, and
human carbon relase has caused it o be thrown, and depending on which
way it lands, the world will warm up somewhere between 1 and 6 degrees
C. In the next - say - 100 years.

One we can cope with. Wine growing becomes a major industry.
Two is disruptive. Habitats wrecked in the far north and South, major
polar melts. Bangladesh floods, the thames barrier gets put to the test
etc. But not that much more. Kiss goodbye to Aklpine skiing. Warer is a
serious issue in many plces. 1/10th world populations dies, mainly in
tropical regions.

Three is getting serious. Major storms, sizzling summer heatwaves and
serious loss of agriculture in some regions, conversely the Orkneys,
Shetland and the Hebrides become almost pleasant, and iceland and
greenland are actually habitable. Holland and East Anglia under serious
risk, as will be most of the pacific atolls.

Four is heavy. Almost all te ice will melt (polar regions alwatyys
amplify any average change, it seems) and aloads of fresh water dumped
into te sea, with a major change in salination and ocean currents: Huge
changes in global weather patterns. Possible massive relseas of metahne
hydtrates on a scale bpot seen for a million year..serious
deesrtification of many regions. 30% die back in population

5 degrees and its less a question of who dies, more a question of who
doesn't. Almost complete breakdown of much of civilisation. Malaria in
the London swamps, etc etc.

6 degrees and its really last man sitartray rule, food riots, mass
epidemics, famine drought and so on.

And no one knows which number will come up, or even if what we may or
may not do now will make it a lower one. There is a problem, you see, in
that when climate changes, it never ever does it gradually. The ice
records show that in polar regions at least, it tends to go 5-6 degrees
one way or the other, sit there, and then flip back. In short it
exhibits all the normal characteristics of a chaotic system, with more
than one strange attractors. Let's say the earth is stable where it has
been for the last 100 years, its also stable at 10 degrees colder, and
its been stable at 10 degrees warmer. as well. Its possibly stable at
plus 5 and minus five as well. Or not.

Essentially what the history says is that small climate changes have
ONLY been a featire of the last 10,00 years. Prior to that the climate
has swumg many times in te past from hot and steamy, to more or less
desert, to almost completely frozen.

Triggered by actually very small (relatively speaking), events.
Certainly a lot less interestng than doubling the amount of CO" in the
atmosphere.

And thatst the situation. WE know the climate can flip, and has flipped.
If it was just the CO2, we wouldn't really worry. A couple of degrees
max. The point is that its NOT just the CO2, any more than it was just a
few bad debts that threw the banking system into chaos. There is a lot
of positive feedback in climate. There are billions of tons of methane
locked up in cold deep seas and in permafrost areas. There are huge
tracts of nice reflective ice all over the polar regions.If we lose
those, we get a bit more solar energy input, and a lot more greenhouse
gas effect. Ultimately, life will adapt and plant life and plankton
populations will soar, as cities return to jungle or desert or sink
beneath the rising sea levels, and CO2 will get laid down again as
hydrocarbons. Take 10,000 years, but that's not that long.

THEN the climate will flip back to an ice-age. Maybe.


Nothing much will be done, now. Its already too late. Copenhagen will be
a complete flop, climate change will happen, and billions will die.

The smarter countries will be those with cold regions and nuclear power
stations. And No socialist governments. Military dictatorships will be
the most likely result. Millions of Russians and Chinese will die, as
they always have. Africa will survive in pockets, but 90% will die.
India will struggle on with maybe only 50% dying.

Bangladesh isn't even worth saving.

You will understand what I mean when the camel trains are trading salt
round the M25.;-)

"Roger Chapman" wrote in message
...

1."The temperature anomaly for 2008 was not statistically significantly
different from 1987."

Conveniently ignoring the fact that all the other years from 2000 onwards
including 2009 are.

That would be the one that the MET office doesn't think was as warm as NASA
does.


2 "And still the conclusion is that no one knows because the changes
argued about would take thousands of years to raise sea levels
discernibly."

Funny that those on the other side are predicting sea level rises of
noticeable size by the end of the century and, depending on what exactly
he was on about, are already reporting significant rises in sea level due
to expansion as the seas warm.

Facts? not from wiki though.

dennis@home wrote:

1."The temperature anomaly for 2008 was not statistically
significantly different from 1987."

Conveniently ignoring the fact that all the other years from 2000
onwards including 2009 are.

That would be the one that the MET office doesn't think was as warm as
NASA does.

I am not sure what you mean. There are after all 10 years in the period
2000 - 2009. If you meant to refer to 2005, the year that NASA ranks
highest and the Met Office second highest, that is of course one of the
years that is significantly warmer than 1987. Lindzen incidentally,
despite being a Merkin, chose to ignore 2005 and to refer to 1998 as "a
relative maximum".


2 "And still the conclusion is that no one knows because the changes
argued about would take thousands of years to raise sea levels
discernibly."

Funny that those on the other side are predicting sea level rises of
noticeable size by the end of the century and, depending on what
exactly he was on about, are already reporting significant rises in
sea level due to expansion as the seas warm.

Facts? not from wiki though.

Again I am not sure what you mean. It appears to me that Lindzen is
saying that even if the warmers get the rate of ice melt they predict
there will not be a discernible rise in sea level even in a thousand
years. Seeing the source on this occasion was the Times Online it
obviously wasn't from Wikipedia. I wouldn't consider the Times a
particularly trustworthy source but as the quotation is direct from the
horse's mouth it is at least an accurate repetition of what Lindzen wrote.

Tim W wrote:
If the whole thing is as clear cut as some would like to believe, I wouldn't
expect to have 2 senior academics from top institutes in the relevant field
holding somewhat dissimilar views.

There is a difference between "randomly chosen", and "selected to
make a point". Even if 998 of 1000 academics agrreed, I might
still find a list of 3 with significantly differing opinions.

#Paul

The Natural Philosopher wrote:

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

No.

Buying a horse and winning a race with it is commerce.

Placing a bet on the horse is the normal stock market.

Coming up with a seven race accumulator is derivative trading.

Huge wrote:

On 2009-12-18, Steve Firth wrote:
The Natural Philosopher wrote:

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

No.

Buying a horse and winning a race with it is commerce.

Placing a bet on the horse is the normal stock market.

Coming up with a seven race accumulator is derivative trading.

Nope. Accumulators are no different to placing a bet using the winnings
of the previous bet.

Placing a bet on a horse and then reselling that bet would be a derivative
trade. The value of the resold bet would rise and fall as the odds on
the underlying "asset" (the actual bet placed on the nag) changed.

Accepted, but there's no real equivalent in horse racing to derivative
trading. Accumulators were as close as I could come. It shows up what a
crappy analogy horse racing is as far as financial markets are
concerned.

"The Natural Philosopher" wrote in message
...

6 degrees and its really last man sitartray rule, food riots, mass
epidemics, famine drought and so on.

We have already had food riots as a result of "green" policies in case you
missed it.

In message , Huge
writes

Can someone kindly give me an explanation of derivatives? Preferably in
plain English:-)

"A derivative is a financial instrument that is derived from some
other asset, index, event, value or condition (known as the underlying
asset). Rather than trade or exchange the underlying asset itself,
derivative traders enter into an agreement to exchange cash or assets
over time based on the underlying asset. A simple example is a futures
contract: an agreement to exchange the underlying asset at a future date."

OK. so back to TimW's point. Can they kindly bet/trade with their own
money and not use savings I have entrusted to the banks. Also, will said
banks kindly not lend out my funds unless the loan is backed by adequate
collateral.

regards

--
Tim Lamb

In message , Tim W
wrote

Well put argument.

I'm just deeply suspicious because of the political swerve on it and the way
that proponents seem to act in a manner more befitting to religious zealots.

If the whole thing is as clear cut as some would like to believe, I wouldn't
expect to have 2 senior academics from top institutes in the relevant field
holding somewhat dissimilar views.


The ONLY reason that so many "scientists" support the theory of man
made climate change is it is a funding bandwagon and many of them
wouldn't have a job if they had other views.

The ONLY reason that politicians have jumped on the same bandwagon is
that they can see as a massive source of revenue in the way of green
taxation.

--
Alan
news2009 {at} admac {dot} myzen {dot} co {dot} uk

Huge
wibbled on Friday 18 December 2009 14:43


OK. so back to TimW's point. Can they kindly bet/trade with their own
money and not use savings I have entrusted to the banks.

And where do you imagine the interest the bank pays you on your savings
come from?

From lending my money to its other customers via bank loans and mortgages,
both potentially relatively safe if the bank sticks with basic tried and
tested rules.


If I wanted to play poker, I would be asking the bank about high risk high
yield funds, not its basic savings with a modicum of interest accounts.

No one had much sympathy for the Lloyds Names when things went tits up after
the storms of 87. They *knew* they were in a high risk high returns game.

Little Granny Smith with her life savings in a few % ordinary savings
account expects security and reliability.

Cheers

Tim

--
Tim Watts

This space intentionally left blank...

Steve Firth wrote:
The Natural Philosopher wrote:

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.

No.

Buying a horse and winning a race with it is commerce.

Placing a bet on the horse is the normal stock market.


No it isn't. That's syndicating the horse.


Coming up with a seven race accumulator is derivative trading.

No, that's highly geared derivative

Steve Firth wrote:
Huge wrote:

On 2009-12-18, Steve Firth wrote:
The Natural Philosopher wrote:

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.
No.

Buying a horse and winning a race with it is commerce.

Placing a bet on the horse is the normal stock market.

Coming up with a seven race accumulator is derivative trading.
Nope. Accumulators are no different to placing a bet using the winnings
of the previous bet.

Placing a bet on a horse and then reselling that bet would be a derivative
trade. The value of the resold bet would rise and fall as the odds on
the underlying "asset" (the actual bet placed on the nag) changed.

Accepted, but there's no real equivalent in horse racing to derivative
trading. Accumulators were as close as I could come. It shows up what a
crappy analogy horse racing is as far as financial markets are
concerned.
A bet is derived., It is neither an interest in the horse, nor the race
directly. It is in essence a contract relating to something outside the
interests abnd control of the horse owner and the race stewards. I.e. a
derivative.

As is e,g. insurance on a house.

Huge wrote:
On 2009-12-18, Steve Firth wrote:
Huge wrote:

On 2009-12-18, Steve Firth wrote:
The Natural Philosopher wrote:

If you like, buting a race horse and winning a race with it, is the
normal stock market.

Placing a bet on the horse is a derivative.
No.

Buying a horse and winning a race with it is commerce.

Placing a bet on the horse is the normal stock market.

Coming up with a seven race accumulator is derivative trading.
Nope. Accumulators are no different to placing a bet using the winnings
of the previous bet.

Placing a bet on a horse and then reselling that bet would be a derivative
trade. The value of the resold bet would rise and fall as the odds on
the underlying "asset" (the actual bet placed on the nag) changed.
Accepted, but there's no real equivalent in horse racing to derivative
trading. Accumulators were as close as I could come. It shows up what a
crappy analogy horse racing is as far as financial markets are
concerned.

Yep.

I can't think of a good "real world" example of a derivative that would
have any relevance to the man in the street.



Any insurance.
Any betting on a sport.
Guarantees.

These are all contracts of value that relate to (derive from) the value
of something else, but are in essence not an actual share in it.

dennis@home wrote:


"The Natural Philosopher" wrote in message
...

6 degrees and its really last man sitartray rule, food riots, mass
epidemics, famine drought and so on.

We have already had food riots as a result of "green" policies in case
you missed it.



that was merely a few revolting peasants.

Huge wrote:
On 2009-12-18, Tim Lamb wrote:
In message , Huge
writes
Can someone kindly give me an explanation of derivatives? Preferably in
plain English:-)
"A derivative is a financial instrument that is derived from some
other asset, index, event, value or condition (known as the underlying
asset). Rather than trade or exchange the underlying asset itself,
derivative traders enter into an agreement to exchange cash or assets
over time based on the underlying asset. A simple example is a futures
contract: an agreement to exchange the underlying asset at a future date."
OK. so back to TimW's point. Can they kindly bet/trade with their own
money and not use savings I have entrusted to the banks.

And where do you imagine the interest the bank pays you on your savings come
from?



hofeuly save loans to teh value OF the deposits, so that in teh last
resort if the bank goes tits up, uyou end up woniong somones motrtgae,
and indeed their house.

The whole point is that by being a tier 1 bank, you can lend 8 (? I
think) times what you have funds deposited to cover. AND then you can
borrow short on the money markets and lend even MORE. Google fractional
banking.

RBS had loans of many times its deposited cash value. And hige money
market borrowings: when the money market simply dried up, it was left
high and dry, and owing ****loads of money.

In message , Huge
writes

And where do you imagine the interest the bank pays you on your savings come
from?

Currently it requires a lot of imagination to find any interest on my
savings:-(

I expect them to charge interest on the collateralised loans, deduct
reasonable costs and pay me the residue.

Globally, if my bank has won a bet, somebody else's bank has taken a hit
so the net proceeds are zero.

regards

--
Tim Lamb

Alan wrote:
The ONLY reason that so many "scientists" support the theory of man
made climate change is it is a funding bandwagon and many of them
wouldn't have a job if they had other views.

Evidence, please. Maybe start at http://gow.epsrc.ac.uk/ and
analyse relevant funded grant proposals. I await your careful
and considered report.

#Paul

in 247384 20091218 213708 wrote:
Alan wrote:
The ONLY reason that so many "scientists" support the theory of man
made climate change is it is a funding bandwagon and many of them
wouldn't have a job if they had other views.

Evidence, please. Maybe start at http://gow.epsrc.ac.uk/ and
analyse relevant funded grant proposals. I await your careful
and considered report.

Don't hold your breath!

Tim Lamb wrote:
In message , Huge
writes

And where do you imagine the interest the bank pays you on your
savings come
from?

Currently it requires a lot of imagination to find any interest on my
savings:-(


You need to keep moving the money to earn interest at the moment e.g.
savings account Turbo 2010 pays 3%, as opposed to 0.1% in Turbo 2009
with the same bank. That lasts for a year and then you switch to Super
Charge 2011 or whatever. What the banks are saying is, if you can't be
bothered to go through the hoops, we won't pay you any interest at all.
I imagine a sufficient number of customers fall in that category for it
to be profitable.

In message , Stuart Noble
writes
Tim Lamb wrote:
In message , Huge
writes

And where do you imagine the interest the bank pays you on your
savings come
from?
Currently it requires a lot of imagination to find any interest on
my savings:-(


You need to keep moving the money to earn interest at the moment e.g.
savings account Turbo 2010 pays 3%, as opposed to 0.1% in Turbo 2009
with the same bank. That lasts for a year and then you switch to Super
Charge 2011 or whatever. What the banks are saying is, if you can't be
bothered to go through the hoops, we won't pay you any interest at all.
I imagine a sufficient number of customers fall in that category for it
to be profitable.

I do try.

Mostly these high paying accounts are either 12 months, no withdrawals
or offered by foreign or banks *small enough to fail* and not employing
lots of Labour voters.

Some friends were badly hit by the BCCI collapse so I avoid the top rung
of interest payers.

regards

--
Tim Lamb

Huge
wibbled on Saturday 19 December 2009 11:32

On 2009-12-18, Tim W wrote:
Huge
wibbled on Friday 18 December 2009 14:43


OK. so back to TimW's point. Can they kindly bet/trade with their own
money and not use savings I have entrusted to the banks.

And where do you imagine the interest the bank pays you on your savings
come from?

From lending my money to its other customers via bank loans and
mortgages, both potentially relatively safe if the bank sticks with basic
tried and tested rules.

And how many utility savers have lost money in the current banking crisis?

Little Granny Smith with her life savings in a few % ordinary savings
account expects security and reliability.

And that's exactly what she's got.



With a little help from the taxpayer, which shouldn't be necessary IMHO.

--
Tim Watts

This space intentionally left blank...

Huge wrote:
On 2009-12-18, Tim W wrote:
Huge
wibbled on Friday 18 December 2009 14:43


OK. so back to TimW's point. Can they kindly bet/trade with their own
money and not use savings I have entrusted to the banks.
And where do you imagine the interest the bank pays you on your savings
come from?
From lending my money to its other customers via bank loans and mortgages,
both potentially relatively safe if the bank sticks with basic tried and
tested rules.

And how many utility savers have lost money in the current banking crisis?


every one. To the tune of £5k per head that will have to be clawed back
somehow.

From those that can pay. Those that cant, wont have to of course.

Willy Nilly, Gordon has made us all shareholders in bankrupt banks.



Little Granny Smith with her life savings in a few % ordinary savings
account expects security and reliability.

And that's exactly what she's got.