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1000x Systemic Leverage: $600 Trillion In Gross Derivatives "Backed" By $600 Billion In Collateral
Zero Hedge ^ | 12/24/2012 | Tyler Durden

Posted on 12/25/2012 7:55:15 PM PST by SeekAndFind

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To: Mogger

I’m pretty sure options are included in any course on markets and investing in college.
Back to your example there’s no systemic risk to a purchase of a call. The defined risk is simply the amount paid for the call. Now someone selling a naked call, one they are not long the underlying security has a great deal of risk. Selling puts would entail risk from the strike down to zero. All the risk should of course be mitigated by hedging.
The risk in the article is more along the lines of bond insurance as well as capital requirement rules.


21 posted on 12/26/2012 4:58:46 AM PST by wiggen (The teacher card. When the racism card just won't work.)
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To: ctdonath2

“This in contrast to paper currency, where the paper is imputed with actual value verified by simple possession.”

Exactly. The ultimate totalitarian enslavement...digital. This socialist-induced debt fiasco is the vehicle used to take us there.

http://www.youtube.com/watch?v=7dFVFJ0iRRA

From the link above...

“How much of your wealth is allocated as zeroes ad ones on computer servers? How much is physical, in your possession and defensible?”

“If you can’t stand in front of it with an assault rifle and defend it...it’s not really yours.”

“It can be confiscated instantaneously.”

DIGITAL enslavement is the ultimate totalitarian tool. You won’t have an “assault rifle” or a bullet. The transaction will not be allowed. Your time of life/labor is the treasure of the totalitarian slavemaster.

“Socialism Is Legal Plunder” - Bastiat

BIG GOVERNMENT IS CRONY SOCIALISM a forewarning of TOTALITARIANISM

DEFUND/DISMANTLE domestic socialist collectives.

DEPOPULATE socialists from the body politic.

live - free - republic


22 posted on 12/26/2012 5:51:36 AM PST by PGalt
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To: Mogger

Nice explanation. So, there is a grand house of cards with cards added every day. And, any major economic event will send this house of cards crashing taking the world economic system with it.


23 posted on 12/26/2012 5:54:42 AM PST by VRW Conspirator (We were the tea party before there was a tea party. - Jim Robinson)
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To: SeekAndFind

Derivatives have become “the world’s casino”, a scheme by which sovereigns can ruthlessly speculate using virtually no margin. If this .1% margin was examined, I imagine that this $600b collateral is made of sawdust that, weight for weight, is valued a million times more than gold.

Nature abhors unsupported margins even worse than vacuums.


24 posted on 12/26/2012 8:18:27 AM PST by yefragetuwrabrumuy (Pennies and Nickels will NO LONGER be Minted as of 1/1/13 - Tim Geithner, US Treasury Sect)
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To: VRW Conspirator

If you haven’t already seen Ann Barnhardt’s latest YouTube 8 part series, you need to. It takes 2 hours and 30 min. But worth it.


25 posted on 12/26/2012 9:15:23 AM PST by wastoute (Government cannot redistribute wealth. Government can only redistribute poverty.)
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To: ctdonath2
You wrote: "Digital currency is debt. That’s the only way ownership of the bits can be validated. This in contrast to paper currency, where the paper is imputed with actual value verified by simple possession."

Paper currency was imputed with actual value back when it said things like "Pay to the bearer on demand". Or, even more so when you could trade a dollar bill for 10 dimes that were each about 1/10th of an oz of silver at any bank.

But those days are long gone. All dollars whether printed Federal Reserve Notes or ones and zeros in your bank account represent debt. Dollars are created by banks as debt, that's the only mechanism of creation of money in America now, and the fact that the Treasury prints up a small fraction of the money in circulation as currency doesn't change that fact.

Or, at least that is my understanding. You seem to be making a different point, could you better explain what you mean?

26 posted on 12/26/2012 10:23:20 AM PST by Jack Black ( Whatever is left of American patriotism is now identical with counter-revolution.)
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To: wastoute
Ann Barnhardt’s latest YouTube 8 part series,

Seen all 8. Had to change my underwear. I am spreading the word. The question is when?

27 posted on 12/27/2012 5:17:46 AM PST by VRW Conspirator (We were the tea party before there was a tea party. - Jim Robinson)
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