Quadrillion Dollar Derivatives Market 20 Times Global GDP

Markus Stanley: Derivative bets not a zero sum game, have far reaching real world consequences

Bio

Marcus Stanley is the Policy Director of Americans for Financial Reform. Americans for Financial Reform is a coalition of more than 250 national, state, and local groups who have come together to advocate for reform of the financial sector. Members of AFR include consumer, labor, civil rights, investor, retiree, community faith based and business groups along with prominent independent experts. Dr. Stanley has a Phd in public policy from Harvard University, and previously worked as an economic and policy advisor to Senator Barbara Boxer, as a Senior Economist at the U.S. Joint Economic Committee, and as an Assistant Professor of Economics at Case Western Reserve University.

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.
After the crisis in 2008, many of us became aware of some language, a vocabulary we hadn't heard before—derivatives, credit default swaps, synthetic bets, this whole dark market that now involves, according to one academic, perhaps as much as $1 quadrillion. So what's $1 quadrillion look like? Well, take a look at these graphics. These are done by kokogiak.com. Here's what $1 trillion looks like if you put it into a queue next to the Empire State building or the Sears Tower. Okay, that's $1 trillion. Well, here's what $1 quadrillion would look like. Yeah. Enormous. So $1 quadrillion dollars—it boggles the mind. This means that it's—the size of the derivatives market is something like 20 times the value of all products produced on the planet.Well, people say, well, if this is so big and have such enormous implications to the global economy, it should be regulated. And that's a subject of our interview today, 'cause there's a big battle going on about whether or not this market will be regulated, and if so, how.Now joining us to talk about all of this is Markus Stanley. Markus is the policy director of Americans for Financial Reform, which is the main public interest coalition working for stronger financial reform. He previously worked as a senior economist at the U.S. Joint Economic Committee and as an assistant professor of economics at Case Western Reserve University. Thanks very much for joining us, Markus.