Read this article, which I just found: http://www.villagevoice.com/2009-01-28/news/what-cooked-the-world-s-economy/2 http://www.villagevoice.com/2009-01-28/new

Read this article, which I just found: http://www.villagevoice.com/2009-01-28/news/what-cooked-the-world-s-economy/2 http://www.villagevoice.com/2009-01-28/news/what-cooked-the-... An excerpt: About $2 trillion in credit derivatives in 1989 jumped to $8 trillion in 1994 and skyrocketed to $100 trillion in 2002. Last year, the Bank for International Settlements, a consortium of the world's central banks based in Basel (the Fed chair, Ben Bernanke, sits on its board), reported the gross value of these commitments at $596 trillion. Some are due, and some will mature soon. Typically, they involve contracts of five years or less... Warren Buffett branded derivatives the "financial weapons of mass destruction." Felix Rohatyn, the investment banker who organized the bailout of New York a generation ago, called them "financial hydrogen bombs." If, in an old issue of Superman, Lex Luthor had plotted to issue six hundred trillion dollars worth of baseless assets -- an amount approximately equal to the economic output of the entire world for an entire decade [1] -- and stir them together with the world's actual assets, everyone would have agreed that it was over the top. Who could believe that the planet would fall for an outrageous plot like that, even in a comic book? So, yeah. It seems reasonable to suggest that this behavior is, to first order, essentially evil. [2] --- [1] Global GDP in 2008: $70.65 trillion US dollars. (http://en.wikipedia.org/wiki/World_economy http://en.wikipedia.org/wiki/World_economy) [2] This phrase is one of my favorites. I've borrowed it from a colloquium speaker at the Cornell physics department, who used it to refer to Edward Teller. I don't remember if Hans Bethe (Teller's former colleague on the Manhattan Project, later turned arms-control advocate) was in the audience at the time, or whether he laughed. My seat wasn't that good.