You'd never read or hear about this from a 'credible,' 'mainstream,' or 'known' source. But double and triple check the astounding claim regarding this 600 Trillion Dollar shit storm that is about to hit. Most of you probably know about this already, but in case you hadn't, now you'll begin to realize why there is one tempered statement after another, for weeks now, from world leaders, and from officials attending the emergency G8 meeting recently convened to deal with the 'global financial crisis.' If you can think of a reasonable way of dealing with this crisis, jot it down and send it to any of the main central bankers - they are clueless, and who can blame them, now that this beast has grown into an unstoppable force, threatening to cast a giant shadow over any puny 'bailout' or 'stock injection' plans that they've been muttering about. http://seekingalpha.com/article/996...s-emergency-meeting?source=article_sb_popular Coming Soon: The 600 Trillion Derivatives Emergency Meeting by: The Prudent Investor October 13, 2008 Toni Straka Here is an update on the size of the derivatives market with the latest official figures (.pdf) [ http://www.bis.org/publ/qtrpdf/r_qa0809.pdf#page=108 ] from the Bank for International Settlements (BIS). Hold your breath, as we are not anymore talking paltry billions but TRILLIONS of whichever fiat currency. Current emergency meetings on banks and markets are still only in the stage where politicians and central bankers are bickering over how to create a few more hundred billions Euros and FRNs. But toxic MBS pale in comparison to the mushrooming growth of the derivatives market. According to figures released in the quarterly review of the BIS (pp A103) [ http://www.bis.org/publ/qtrpdf/r_qa0809.pdf#page=108 ] in September the total notional amount of outstanding derivatives in all categories rose 15% to a mindboggling $596 TRILLION as of December 2007. Two thirds of contracts by volume or $393 TRILLION fell into the category of interest rate derivatives. Credit Default Swaps had a notional volume of $58 TRILLION, seeing the sharpest relative increase after a volume of $43 TRILLION a year earlier. Currency derivatives reached a volume of $56 TRILLION. Oh, and every grand balance sheet comes with a trash can. Unallocated derivatives with a notional amount of $71 TRILLION are looming over the heads of the disintegrating investment community too. However You Look At It, This Is an Accident Waiting To Happen Don't lose your sleep because of these numbers that KO my desktop calculator. In an ideal world - in which we are not - long and short derivatives would net out each other, leaving only a fraction of risk. The BIS tries to assess this net risk with a total of $14.5 TRILLION (2006: 11.1 TRILLION) in gross market value for all contracts but comes up with a second figure. The so called Gross Credit Exposure appears almost moderate at $3.256 TRILLION after $2.672 TRILLION a year earlier. Even when taking the lowest of these figures shudders run down my spine. All emergency talks have so far focused on a few hundred billions in fiat currencies, but the current nervousness demonstrated by hectic talks of finance ministers and central bankers all over the globe should give everybody a vague idea that something here may blow up any day. This pool of so far silent derivatives without a major bust can come to life any day with the failure of a multinational financial firm. The BIS review is a good way to grasp the dimensions long term monetary expansion has brought upon us. A net risk of $14 TRILLION compares with the annual GDP of the USA. Nobody, absolutely nobody can afford this tab in the case of an unorderly unwinding of this market that is roughly 12 times the size of the global economy. I conclude a lot more paper promises will be burnt in the coming derivatives tsunami. As a reminder, most of these contracts have been moved off balance sheets into under capitalized subsidiaries that profited from the good rating of the parent company. But in case of a default it is this nasty, nasty huge notional amount that becomes a liability. As the vast majority of these contracts have no market, failure will come in the form of counterparty risk. This makes all the current emergency meeting a bit more understandable if politicians are already aware of the biggest bubble that may find no other way of deflation than a sudden burst. I base my sense of urgency on the rapid growth of the net risk in only one year, rising a stunning 30% at a time when the first signs of the credit crunch appeared. German chancellor Angela Merkel said ahead of an emergency meeting with French president Nicolas Sarkozy in a TV interview that she would present a rescue package for German banks on Monday. This is also expected from several other European countries. Italian president Silvio Berlusconi went so far as to suggest a concerted stock exchange holiday. It would fit the other crooked nails in the coffin of free markets.
I think we already see the effects of deleveraging and in my view its giving us good buying opportunities for solid companies now and probably during the next few months. We have already seen such movements from deleveraging in Yen, US-Dollar and probably also oil. Exactly nobody can tell us right now if the worst of this is already behind us or yet to come. I don't think the system is going under and even if so, cash will be worth nothing and you will prefer to own some stocks/gold/real estate instead. Also you should not underestimate that if we see some out of order movements there is still enough cash on the sidelines from gouvernments (China etc.) and Hedgefonds that can and will take a counterpart to profit from the unbalance. I think the greatest risc right now is coming for US-Bonds as soon as people find confidence again in the stock market and move out of US-Bonds it might crash, also putting pressure again on stocks of course later. Yes there are rough times right now but some of the best buying opportunities in our live time.
Sorry, but the market will remain a dysfunctional psychotic crack bitch for many more months to come.......she is looking very rough and no one will trust her for some time!
haaaaaaaaaaaaaaaaaaaa you are alL finally seeing with the blinder's off ! red pill or blue pill Neo??? i heard it was 4QUADRILLION IN DERIVATIVES FLOATING AROUND OUT THERE -WITH NO REALLY LIQUIDITY TO THEM-WHO IS GOING TO BE THE BAGHOLDER??? WHAT HAPPENS WHEN THERE ARE NO BUYERS? AND NO MONEY TO BUY THOSE INSTRUMENTS??? PRAY IT DOES NOT HAPPEN... THE WORLDWIDE MARGIN CALL THAT IS!!!!!!!!
The term New World Order has nothing to do with a gradual, gentle evolution into a more advanced and enlightened society. It means the sudden violent destruction of the Old and the forced rebirth of the New, literally from the ashes of the Old. Through the fears generated by 911 many of the draconian NWO Laws are in place, ready for enforcing at a moments notice. Next the planned financial collapse and global panic will allow them to complete their plan for a New World Financial Order. You think the bankers are at a loss for how to save us? The elite have engineered everything and as I wrote in a bulletin recently... KEEPING US IN THE LOOP Itâs nice to know that unlike our ancestors, today we have access to world events as and when they happen. Indeed our benovolent leaders have allowed us to build an information infrastructure perfect for mushrooms â kept in the dark and fed on crap. Isnât it then comforting to know, as we survey the utter devastation caused by world banks, that our lives and futures are safe in their hands⦠Consider the words of David Rockefeller: âWE are grateful to the Washington Post, the New York Times, Time Magazine, and other great publications whose directors have attended OUR meetings and respected their promises of discretion for almost forty years. It would have been impossible for US to develop OUR plan for the world if we had been subjected to the lights of publicity during those years. But now the world is more sophisticated and prepared to march towards a world government. The supranational SOVEREIGNTY of an intellectual ELITE and WORLD BANKERS is surely preferable to the national auto-determination practiced in past centuries.â (emphasis mine) Guys and gals, freedom, or "auto-determination" is about to be kissed goodbye in one hellish fallout.
Does this all begin with the Obama century? Complete control of modern US policy in the hands of one party.
conspiracy or no conspiracy...the derivatives market fiasco discussed here is one huge asteroid headed towards the world economy.
I wonder if the entire world economy is even worth 600 trillion. Derivatives are just paper right? Cancel all troublesome derivative contracts and make them null and void. That's what it will come to anyway. End of story!