Subject: Re: Derivatives the "secret sauce"?

GDP (Gross Domestic Product) measures the total market value of all final goods and services

From your post:

Securitization accounts for approximately 50% of U.S. GDP,

The following sales pitch for securitization:

they are tools of lowering borrowing costs, creating investor liquidity, distributing risk efficiently, and expanding opportunities for capital to be deployed across a variety of markets far more expansively (from automobiles to consumer goods to commercial real estate to aviation to anything else creative minds can figure out a way to efficiently securitize). European resistance to securitization is not the opposite of “financialization” – it is resistance to growth and the unlocking of value creation..

This is the sort of argument the financial advisor industry made, when Congress attempted to hold them to a fiduciary standard.

When I was working on my bachelors, in the mid 70s, we talked about the use, and abuse, of leverage. Leverage is great, when things are going well, because it amplifies things like ROI, and makes the honchos look like geniuses. Leverage is poison, when things don't go well, because there are consequences for not servicing the debt. Today's "innovating financial products", are just different mutations of leverage, to make more money fast, without worrying about long term consequences, if things don't go according to plan.

Steve