Archives for March 2016

March 2016 - Page 24 of 27 - Money Morning - Only the News You Can Profit From

Why the Apple vs. FBI Fight Is About Much More Than One iPhone

The Apple vs. FBI fight might seem about one company granting access to the data on one device, but the legal implications of this case go far beyond that.

The FBI is seeking access to the iPhone of one of the San Bernardino attackers, but Apple has resisted. It may look like Apple is simply being stubborn.

But when you dig into the company's thinking, it becomes clear why Apple has decided to fight the government...

Here's What Makes the Derivatives "Monster" So Dangerous (for You)

The $650 trillion derivatives market is a nightmare scenario waiting to happen.

First problem: the size. It's 36 times the size of the U.S. GDP and over eight times larger than the world GDP, that is, the entire global output of the entire world in a year.

While credit default swaps (the type of derivative that played a huge role in the financial crisis) have shrunk significantly in size since the financial crisis, they remain large enough to constitute a potential time bomb inside the financial system that could blow up any time.

Second problem: the interconnectedness. Every derivative contract involves two parties. In a crisis, one of these counterparties may be unable and/or unwilling to meet his obligations, leaving a volume of broken contracts that will overwhelm these institutions and render them instantly insolvent.

That's why it's crucial we understand the ramifications of these instruments – because while the derivatives monster is ugly, there are things individual investors can do now.

Plus, one of the worst offenders could be your own bank...