Even Berkshire Hathaway Chairman and Chief Executive Warren Buffett has taken his lumps this recession, but Friday he announced his company’s best quarterly results for nearly two years.
Derivatives Fuel Berkshire Hathaway’s 14% Q2 Earnings Rise
Stock markets were Warren Buffett’s friend as his company posts first rise in earnings for six quarters.The company reported Friday a net income of $3.3 billion, or $2,123 a Class A share, for the three months to June 30, compared with $2.88 billion, or $1,859 a share, for the same period a year earlier. Earnings had previously fallen for six consecutive quarters. Earnings release.
Latest Derivatives update from president Obama
President Barack Obama sent Congress his plan to rein in the $592 trillion over-the-counter derivatives industry, a measure that would cut into a profitable market for banks led by Goldman Sachs Group Inc.and JPMorgan Chase & Co.
The proposal issued yesterday would pressure derivatives users such as banks and hedge funds to move away from opaque customized contracts by imposing higher capital and margin requirements on the instruments.
What is derivative trading ?
According to wikipedis
A Derivative is a financial instrument that is derived from some other asset, index, event, value or condition (known as the underlying). Rather than trade or exchange the underlying itself, derivative traders enter into an agreement to exchange cash or assets over time based on the underlying. A simple example is a futures contract: an agreement to exchange the underlying asset at a future date.
What Does Derivative Mean?
A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.
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THE Australian Securities & Investments Commission is looking to strengthen protection for retail investors trading derivative products such as contracts for difference.
China: Chinese Regulator Issues New Rules To Regulate Derivatives Transactions