>I believe Michael was implying that "derivatives are bad" which
>I think isn't a correct characterization of the situation.
Oh, I agree that it's wrong to demonize derivatives (aside from the general demonization of Kapital, but that's another story). Still, I don't think anyone's proved that derivatives are good either. They've proliferated like hell, but, aside from the folks who sell them, who's benefited? As the article on hedging in the New Palgrave Dictionary of Money & Finance points out, you may be able to hedge price, but not volume, so income is unhedgeable.
I won't even mention that most amateurs who trade futures and options lose their shirts, because that'd be too obvious.