Michael Greenberger on Derivatives
C-Span had a nice segment on Friday with Michael Greenberger, a law professor at the University of Maryland, on derivatives. He characterizes derivatives as like bets, and many of them as essentially bets on other people’s misfortune. The callers’ questions are great too. His answer to the last question, in which the caller raises the notion that it was regulators that caused all the trouble by requiring banks to make risky loans, is nice and concise—a good response without being overheated. I wish he’d added that far from making loans because the gov’t required them to, banks were falling all over themselves to make such loans once it was clear how much money was to be made by packaging the loans and selling derivatives based on them.
I would embed the video here, but C-Span doesn’t appear to provide a mechanism for doing so. Hat-tip to LF.