I’m researching a new article on the financial crisis. Finance is something that’s fascinated me, but not quite my strongest area yet. The article I proposed has to do with speculation in the markets. Okay, I’ve lost most of you right now. I know, I know. Stop snoring and listen up, though, for I’m about to entertain you with a Not So Boring Guide to Financial Markets, as told by me, an interested observer.
There are such things as pork bellies. And guess what? They’re exactly what they say they are. Pork bellies. Used in sweet-and-sour pork dishes. Swear to God. Here’s a Wikipedia link explaining this little phenomenon.
People bet on the weather. This one I’ve known for a while. In one sense, it’s helpful for people whose livelihoods depend on the weather (such as a farmer who needs just enough rain and no flooding or droughts) – it’s used as a way to recoup losses. Hey, if you own 1,000 acres in Iowa and your corn crop pays your bills and feeds your kids, you’re going to consider seriously putting money down on the possibility of a natural weather event ruining your crops. It’s a way to get at least some money should the worst happen. Yet in another sense, it feels a lot to me like gambling-gone-wrong. Educated guesses are made, based on actual forecast models (companies make their living at this type of thing), of say how many hurricanes will hit Florida or how many earthquakes will rattle Aunt Millie out in San Francisco. Tons of corporations – household names even – use weather derivatives as a way to lessen their risks.
The Dutch have a very active, very lucrative stock market based on…. tulips. Hey, if your country’s largest cash crop was in tulips, you’d have a tulip stock market, too. This is one sophisticated, heavily traded market. And yes, like Wall Street, the tulip market crashes. Check it out here.
You can actually sell stock you don’t own yet. It’s called short selling. Honest to God. They do this. A lot. You put down a bid on something that’s got a low price – say oil (ha!). You buy an option, which is the right to sell an underlying security, such as oil stock, whenever the price drops. Mind you, you don’t own this. You just own the right to sell it whenever you do own it. You’re borrowing it, or renting it from the lender. Oy. Stick with pork bellies.
If you can dream it up, it can be traded. Ask Enron if you can bet on energy. They did, and they nearly brought down all the power grids in California in the process. Not to mention their own business because of the manipulation of facts in nearly every instance, but I digress. People trade energy, carbon credits, real estate, emissions, nutrients, orange juice, lumber, cows, and yes, pork bellies. It’s educated gambling and you can lose your shirt (if you haven’t traded it yet).
I tell you all this because this is an entirely new area for me. On the surface, it sounds like a high-level, ultra-detailed and completely boring topic, doesn’t it? But you now know a bit more than you used to about financial markets, and also know that any topic can be interesting, even fun, if you get excited about it. When was the last time you allowed yourself to be intrigued in a new area? What’s the most out-of-the-box topic you’ve ever taken on?
I know very little about stock market particulars, but it is fascinating. I go on Google Finance sometimes and look at different companies and how they’re doing.
NPR’s fantastic show “This American Life” has two really thorough hour-long shows about the crashing stock market, and they actually make it interesting. You can listen to them online here and here.
Wow, those ARE interesting tidbits!
It’s funny, I’ve heard a lot of writers scoff at writing for affiliate marketing web pages and advertorials and other such “non-journalistic” forms of writing, but this is exactly why I do it and sometimes even enjoy it. I get to learn all sorts of strange facts and about topics and hobbies that I’d never research on my own. It makes for great party chit-chat when you can talk about Japanese antiques, the state of franchise businesses and strange Olympic facts all in one go! Or maybe that’s why they all walk away with blank expressions after talking to me…
I love writing about finance/investing, so this was a great post to read!
For me, writing about automobile parts and repairs was “out of the box.” I know how to check my oil, add windshield wash, check my tire pressure, put air in my tires, and change the air filter in my car, but that’s it. Writing about how to change disc brakes and customize an exhaust system was kind of interesting.
Oh Leigh, I’d LOVE that kind of work! I actually change my own oil and I can diagnose car problems (thanks, Dad!). I stop short of replacing brakes (no pun intended) and anything beyond what I can reach under the hood.
They love you, Amanda. They’re just digesting all that information…. ;))
Thanks so much for the links, Jen! I’ll listen. I love unusual approaches to old topics.
Angie, you’re where I’d like to be. I’m a financial wanna-be!
I actually *did* know that about pork bellies! My husband is an economist and he likes to wow me with tidbits like this. The English major in me never thought I’d be interested in anything remotely related to markets or the economy, but now I find it all extremely fascinating.