What went wrong with orange county’s derivatives trades

ML - The way the world works - analyzing how things work - A podcast by David Nishimoto

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Orange county misread the credit market trend and experience massive losses and bankruptcy from a derivatives collapse. $1.6 billion upside down in trades, no exist, panick, forced restructuring. Buying and selling derivatives is gambling. Someone is a winner and someone is a loser. Some of the biggest users of derivatives are government sponsered enterprises (GSE): Fannie Mae, Ginnie Mae, and Freddie Mac.