Those pitiful numbers lead us to the innumerable problems posed by derivatives, the same financial instruments that led to the chaos at Enron, which before it failed operated a huge\u201d\u201dand almost completely unregulated\u201d\u201dderivatives exchange business. According to the Bank for International Settlements, the global derivatives market is now worth some $676.5 trillion. That’s $676,500,000,000,000. That’s a fivefold increase over the value of derivatives that were traded in 2003. Further, that $676.5 trillion is 51 times America’s current gross domestic product.<\/p>\n
In 2002, the world’s smartest investor (and my pick for president this year), Omaha billionaire Warren Buffett, issued his annual letter to the shareholders of Berkshire Hathaway. In it, he called derivatives “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”<\/p>\n