Credit Derivative

You need credit. Some day. You have cash. You have debt. Other parties need credit...some day. They have cash. They have debt. But it's...lumpy.

Sometimes you need cash...a lot of it...like an airline in a bad economy. And in that same bad economy, drug companies do just fine. Like, times would have to get pretty bad before people stopped paying for their Viagra. So in those times, the Steady Eddies might be givers of debt to those who are in need.

The credit derivatives system just mollifies the volatilty in those peak and valley times, and allows for better financial planning among companies, countries, banks and pretty much everyoone who needs credit.