U.S. banks’ derivatives exposure explodes to $200 trillion

Discussion in 'Economics' started by misterno, Apr 2, 2009.

  1. 100 trillion, 150 trillion, 200, etc.

    What's the difference? They couldn't pay off any of it so who cares how much bigger it has gotten.

    The governments of the world simply will not (or can't?) let certain institutions fail.

    World government agenda 2009-201?---

    Print money, tell lies, print money, tax the workers, print money, tell more lies, raise taxes, print money.
  2. Corelio


    The unusual jump is associated with GS and JPM becoming commercial banks. There is nothing "extraordinary" on this report.

    The only interesting fact is that the exposure to interest rate swaps dwarfs by several fold their exposure to any other derivative asset. I would suggest that readers start looking at the havoc interest rate swaps start to cause private businesses that sold variable rate debt back in the go-go days and "hedged" with interest rate swaps.

    The precipitous drop in interest rates has forced businesses to post collateral against the swaps. So now on one hand we have the Fed pulling the lever of lower interest rates while on the other you have businesses stuck with these swaps and having to post ever increasing amounts of collateral.
  3. So why blame the IRS mechanism for this, I wonder?

    People who bot into the banks' song and dance were either a) complete idiots or b) corrupt. It's a repeat of the same sad story (see Hammersmith and Fulham; Orange County and now we have Jefferson County, AL). Swaps are just instruments and how they're used is up to the people who make the decisions.
  4. :mad: I think they like the game....................let the game continue.
  5. In fact, let me mention one thing. People keep going on about CDS, interest rate swaps and other financial derivative mkts being too big in notional terms.

    Why is nobody talking about the life insurance mkt? It's over $19trn in face value in the US alone. Why are we not standardizing that and creating an exchange to clear those?