Credibility derivatives: Difference between revisions

Thus was born on the first “[[credibility pair]]”: Keith Jarrett and Rick Astley. In a normal, orderly, and functioning market, naturally negatively taste-correlated artists.

Before long, [[credibility derivatives]] were big business in the clothing industry: a segment of the economy, of course, with significant exposure to sudden, arbitrary changes in the public’s opinion.

At first record shops, and soon other sellers of goods largely dependent for their value on arbitrary public opinion, began methodically to hedge their risk to those changing tastes. A popular variation was the “[[credibility default swap]]” wherein a seller with significant exposure to inventory of questionable long-term hipness could but protection out to five years. Then, upon the occurrence of a publicly recognised “credibility event”, the proprietor (“Buyer”) could deliver that inventory to the “Seller” against payment of its notional hip value, struck as at the trade date of the contract.