Real Estate Derivative Futures Soar

Written by C. Cranium

Sunday, 25 July 2010

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Smash this thing and put the money in deravatives.

Leave it to Wall Street to come up with yet another derivative deviation that is targeted for Global Warming believers. Math geniuses at Pamona Junior College have happened upon a math formulas that can be used to calculate future real estate values. The heady algorithm is the basis for a new group of products that bet on real estate values to climb for property located at low elevations near desirable beach locations. The algorithm calculates how much values will appreciate stated in percentage amount and elevation gradient.

As an example, take a highly desirable beach frontage neighborhood in Southern California, where properties sell for five to ten million dollars in 2010. Next factor in the yearly estimated sea level rise based on the averaged predictions of several differing governmental agencies and scientific think tanks.

Now factor in the current value of other properties above the chosen area - in bracketed altitudes and future dates -- 50, 100, 200, 500 feet, and 2015, 2020, 2030, 2040, 2050. The mile long algorithm adds other factors like future weather for the chosen real estate, proximity to metropolitan areas, and the likelihood that beaches will continue to form as the sea rises. And the final factor is the percentage of consensus among the scientific community that Global Warming is occurring and at what rate.

Leverage is an important factor in derivatives and Stanley Morgan of Happy Time Derivatives, no relation to Morgan Stanley, said, "The possibility of leverage hedging values of real estate speculative optionability portends of upside underlying conditions, and that is way cool".

The complicated derivatives market is not for the faint of heart since there is no way to tell what you are buying, or what the heck the algorithm does. Ignoring the non-believers of low percentage odds, and those who believe in Global Warming and trust the Junior College system in California - especially in Pomona -- the derivatives can be wagered on at Happy Times, Beach Blanket Securities, and on the corner of Belleview and Rodeo.

The story above is a satire or parody. It is entirely fictitious.

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