Derivatives in a declining market

[CGiuliano]

^^ can they be revamped, or is it a lost cause? If they can be remodeled, then won't it end up detrimental; if you can bet and win on a declining market, will that not ultimately "fulfill itself" and drive the market downward? (this is a bit vague because I do not have any real working knowledge of derivatives other than what I've read)

 

[alain]

What kind of derivatives are you talking about?

 

[CGiuliano]

derivatives based on commercial real estate i.e. derivatives in a declining real estate market.

 

[Roger Trimble]

derivatives based on commercial real estate i.e. derivatives in a declining real estate market.

Are you talking about structured products? Like pools of loans? If so, then I can tell you they are far from a lost cause. I think in a couple of years we'll see even more of them, but there will also be a central clearinghouse. Though vilified, they serve a useful purpose when they're not abused. That's where reform and a clearinghouse step in.

 

[woody]

Also, they will be regulated.