Quote:
Originally Posted by casstony
From Nathan's Economic Edge:
"JPM holds more than $80 TRILLION worth of derivatives.
Those who think that the financial crisis is over are simply living with their noses buried in the sand. The large banks and the government are complicit in trying to hide the rotting smell. Their fraud and deception are going to be the end of both..."
My impression is that we either do a few tough years now and reduce debt, or we condemn our kids to a few tough decades and another world war  ............sorry kids, you lose. |
The total derivative market is US$600 Trillion. It is now believed to be almost entirely toxic...leveraged far worse than the US housing market.
Why worse? Well, unlike a house, really, people can only own 100% of a property. BUT, in the derivatives market, securitization of assets can be leveraged. This means that for every real share out there, there could be 2 or 3 real owners who on paper own 100% of it.
If it unwinds, and it WILL if there's a run on the US dollar, a market 10 x the global GDP will make the stock market, housing market and Dot Com market bubbles seem like dropping $20 on the floor.
Cheers
Mark