Debunking Derivatives — legally speaking

Derivatives have entered popular consciousness with tales of Nick Leeson and the fall of Barings Bank the bankruptcy of Orange County California the court battles of Hammersmith and Fulham culminating in the House of Lords finding that the local authority had been acting ultra vires in entering speculative swaps and more recently the rescue of Long Term Capital Management. Countless newspaper articles have described the use of derivatives and much publicity is given to Warren Buffet when he decries derivatives as financial weapons of mass destruction viewing them as 'time bombs...