Labda hakuna kitu kinachoeleza vizuri zaidi uovu wa mfumo wa kibepari usiodhibitiwa kuliko soko la bidhaa za kifedha zinazotokana na mikataba (derivatives). Warren Buffett, mmoja wa wawekezaji tajiri zaidi duniani na kiongozi wa mfuko wa uwekezaji wa Berkshire Hathaway wenye thamani ya dola bilioni 196, aliwahi kuzieleza derivatives kwa maneno maarufu kama "silaha za maangamizi makubwa za kifedha". Katika ripoti ya mwaka ya Berkshire Hathaway kwa wanahisa mwaka 2002, alisema: "Isipokuwa mikataba ya derivatives imewekewa dhamana au kuhakikishiwa, thamani yake ya mwisho pia inategemea uaminifu wa kifedha wa pande zilizoingia nazo mkataba. Wakati huo huo, kabla mkataba haujamalizika, pande hizo mbili huandika faida na hasara - mara nyingi kubwa sana - katika taarifa zao za mapato ya sasa bila hata senti moja kubadilishana mikono. Aina za mikataba ya derivatives zinakomewa tu na mawazo ya binadamu (au wakati mwingine, inaonekana, wendawazimu)." Buffett alizungumza kwa uzoefu wake wa moja kwa moja, baada ya kununua kampuni ndogo ya bima ya Marekani iliyokuwa na jalada la derivatives katika vitabu vyake. Baada ya kuonyesha mashaka kuhusu thamani yake iliyoonekana kuwa imepanda kupita kiasi, Buffett aliamuru jalada hilo liuzwe kabisa. Baada ya hasara ya mamilioni kadhaa ya dola na kupitia zaidi ya mahusiano 670 ya wahusika wa upande wa pili (taasisi iliyo upande wa pili wa muamala), kazi hiyo ilikamilika.

Perhaps nothing characterises better the excesses of a capitalist system out of control than the Derivatives market. Warren Buffett one of the wealthiest investors in the world and doyen of Berkshire Hathaway’s $196 billion investment fund famously described derivatives as “financial weapons of mass destruction”. In Berkshire Hathaway's annual report to shareholders in 2002, he said, “Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the creditworthiness of the counterparties to them. In the meantime, though, before a contract is settled, the counterparties record profits and losses - often huge in amount - in their current earnings statements without so much as a penny changing hands. The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen)”. Buffett was speaking from first hand experience having bought a small US Insurance company which had a derivatives portfolio on its books. After expressing scepticism over its seemingly inflated valuation, Buffett ordered the portfolio to be liquidated. After several million dollars of losses and wading through over 670 counterparty (the institution on the other side of the transaction) relationships the job was done.

Soko la derivatives limekua karibu kwa kasi ya kiwango cha juu katika miaka 10 iliyopita, na thamani yake inakadiriwa kuwa kati ya dola trilioni 500 na dola trilioni 1,000 (kwadrilioni moja). Kiwango hicho kinazidi kwa mbali uchumi "halisi", ambao unakadiriwa kuwa dola trilioni 50 duniani kote. Sehemu kubwa ya soko la derivatives haidhibitiwi, na inatawaliwa zaidi na soko la OTC (over the counter), ambalo kwa kweli husimamiwa na wahusika wa miamala yenyewe, hasa benki, makampuni ya uwekezaji, hedge funds na wateja wao, ambao ni pamoja na mamlaka za manispaa, halmashauri, mifuko ya pensheni na watu binafsi matajiri. Kulingana na Benki ya Malipo ya Kimataifa (Bank for International Settlements), kufikia Desemba 2007 soko la OTC lilikuwa na thamani ya dola trilioni 596 kwa thamani ya kawaida (notional value). Kwa msingi wake, derivatives ni vyombo vya kifedha ambavyo thamani yake inategemea thamani ya vyombo vya kifedha vya msingi. Ni mikataba inayotegemea utendaji au mwenendo wa bei za mali, badala ya miamala inayohusisha mali halisi wenyewe. Mali hizo ni pamoja na bidhaa za kilimo na madini (commodities), hisa (equities), rehani (mortgages), mikopo ya majengo (real estate loans), hati fungani (bonds), viwango vya riba (interest rates), viwango vya ubadilishaji wa sarafu (exchange rates), au fahirisi (indices), kama vile fahirisi za soko la hisa na fahirisi ya bei kwa walaji (consumer price index). Derivatives zinajumuisha futures, forwards, options na swaps.

The derivatives market has grown almost exponentially over the past 10 years and is now estimated at between $500 trillion and $1,000 trillion (a quadrillion) in size. A level that dwarfs the “real” economy which is estimated at $50 trillion worldwide. Most of the derivatives market is un-regulated and is characterised by the OTC (over the counter) market which is effectively managed by contracting parties to the transactions, mostly banks, investment firms, hedge funds and their customers which include municipal bodies, councils, pension funds and wealthy individuals. According to the Bank for International Settlements as of December 2007 the OTC market was worth $596 trillion in notional value. Derivatives are in essence financial instruments whose value depends on the value of underlying financial instruments. They are contracts which depend on the performance or movement in prices of assets rather than transactions involving the actual assets themselves, and include commodities, equities, mortgages, real estate loans, bonds, interest rates, exchange rates, or indices (stock market indexes, consumer price index, etc.). Derivatives include futures, forwards, options and swaps.

Matumizi yanayotangazwa zaidi ya derivatives ni kupunguza hatari. Lakini kwa kweli, kutokana na asili ya derivatives zilizobuniwa na kutengana kwake na ulimwengu halisi, kiwango chake kikubwa mno, na ukweli kwamba zinashikiliwa na taasisi nyingi sana kupitia mahusiano changamano ya wapinzani wa miamala (counterparty), inaleta shaka kama zinafanikisha lolote zaidi ya kuwa njia iliyopangwa kwa ustadi ya kubashiri kwa kiwango cha janga kabisa. Ili kufafanua zaidi maelezo ya miamala hii, aina tatu maarufu za derivatives; CDOs, Credit Default Swaps na Currency Swaps, zimewasilishwa katika Kiambatisho cha karatasi hii.

The main publicised use for derivatives is to reduce risk. But in fact due to the nature of the derivatives developed and their disconnect from the real world, their sheer scale, and the fact that they are held by such a multitude of institutions via complex counterparty relations, it is questionable as to whether they are achieving anything other than a highly tuned means to gamble on a simply catastrophic scale. To amplify on to the detail of these transactions three popular forms of derivatives; CDOs, Credit Default Swaps and Currency Swaps are presented in the Appendix of this paper.