Derivatives! I finally get it!

Derivatives aren't complicated! Derivatives are gambling! 

The Stock Market is buying an interest in a race horse. Derivatives are betting on the horse race.

Why is this so hard to regulate again, then?

Iceland go boom. Again.

I  have to feel for Iceland. They build themselves a banking system economy using, as near as anyone can figure out, chewing gum, twigs and moxy, and boom! it all explodes.  Refusing defeat, they roll up their sleeves, re-tool, and using their newly flushed currency as a positive, go on a massive tourism blitz. You've seen the advertisements everywhere.

Boom. Volcano explodes.


(and a much bigger one still might!)

Goldman Sachs lawsuit

"Although Goldman Sachs held various positions in residential mortgage-related products in 2007, our short positions were not a 'bet against our clients.' " Instead, the trades were used to hedge other trading positions, the bank said."

Could someone please explain to me how hedging your bet and betting against are at all different. I have to confess to being a trifle confused...

http://www.nytimes.com/2010/04/17/business/17goldman.html?src=tptw