Derivatives: How the Big Game Began

THIS BUSINESS OF DERIVATIVES CAN BE TRACED BACK TO CHIcago, the old hog butcher for the world and stacker of wheat. Chicago learned it could make an easier living by selling pretend wheat and pretend hogs in the pits of the commodities exchanges. These imaginary creatures are called "futures." The point was you could buy a hog future and turn a nice profit before the real hog ever showed up. Or, if you were Hillary Rodham Clinton, you could make 100 times your money on cattle futures without ever having to put up with a cow.

Having taken the bother out...