Credit Derivatives Problem Growing FAST! From $924 Trillion to $984 Trillion.
October 26, 2008 – 6:16 pm
This problem is expanding and the real problem is when we pass the Quadrillion Mark.
After which time, a new currency must be introduced due to the hyperinflation problem that is slowly growing in Asia.
They need to dump U.S. debt. China’s economy is slowing down and soon will become less friendly towards the financial system.
There is NO UNDERSTANDING of what is transpiring.
Maybe it is better that way. There would be a panic.
2 Responses to “Credit Derivatives Problem Growing FAST! From $924 Trillion to $984 Trillion.”
You are confusing credit default swaps with the entire over the counter derivatives market. The vast majority of OTC deivatives are in interest rate swaps not credit default swaps.
By Joseph Heller on Oct 26, 2008
Sorry, I was not very clear.
First, I am not confusing the credit default swaps with the entire OTC derivatives market (of which JP Morgan alone may be on the hook for $77 Trillion).
Second, I am talking about the “credit card” derivatives, derivatives that include tranches built using mortgage backed securities, and any tranche that included bets to the downside of commodities and commercial real estate.
This may make no sense right now, but as the hedge funds collapse under their own weight, you will begin to see the larger part of the iceberg.
Forget 20 to 1, or even 30 to 1.
Imagine someone leveraging 90 to 1. What happens if they cannot pay the debt owed?
For Your Reference: my brooding post from last December.
By admin on Oct 27, 2008