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Credit Default Swaps: A $50 Trillion Problem
moneymorning.com ^ | 04/02/08 | By Martin Hutchinson

Posted on 09/27/2008 9:13:31 PM PDT by Porterville

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A FReeper was explaining this to me the other day. I started researching what it all meant... and it scared the hell out of me.. 42-60 trillion dollars? Up from 29 Trillion dollars from Dec 2006?

The gears of the machine? Where are they now?

1 posted on 09/27/2008 9:13:32 PM PDT by Porterville
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To: Porterville
everything bad happened during Clinton's administration....

there was no BOOM for most of us....maybe if you were heavily invested in the stock market but most people are not.....

and as it turns out, more and more of those "gains" were based on an illusion....

everything bad started with Clinton...

2 posted on 09/27/2008 9:16:27 PM PDT by cherry
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To: cherry

50 trillion dollars... where in the world is 50 trillion dollars?


3 posted on 09/27/2008 9:18:25 PM PDT by Porterville (Im no economist- getting a PHD in economics wasn't economical... it didn' make cents.)
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To: PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; Roy Tucker; GOPJ; dervish; ...

The Money, Banking, and Financial Markets Ping List.

FR Keyword: moneylist

This can be a high-volume ping list at times.

To join, send Freepmail to rabscuttle385.

4 posted on 09/27/2008 9:19:16 PM PDT by rabscuttle385 (No to bailouts, no to amnesty, no to carbon credits, no to Big Government!)
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To: Porterville

They are inventing money.

Isn’t that the domain of the Treasury?

One difference — the Treasury has to follow laws and regulations and such.


5 posted on 09/27/2008 9:22:21 PM PDT by Shermy
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To: Porterville

Finally someone telling it like it is. We are in that much debt. The subprimes were just the trigger. If we pour more debt on watch out. The whole thing will unravel.


6 posted on 09/27/2008 9:22:34 PM PDT by freekitty (Give me back my conservative vote.)
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To: Porterville

It’s like the government is running itself.


7 posted on 09/27/2008 9:23:17 PM PDT by freekitty (Give me back my conservative vote.)
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To: freekitty
The whole thing has unraveled. I didn't understand. I couldn't comprehend numbers of this ridiculous proportion based on bets...

Where were the politicians?

8 posted on 09/27/2008 9:24:01 PM PDT by Porterville (Im no economist- getting a PHD in economics wasn't economical... it didn' make cents.)
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To: cherry

be careful, now!

bill o’reilly said just friday in a tirade that

clinton administration was not involved and was being unfairly blamed by “right wingers”.

/s


9 posted on 09/27/2008 9:24:16 PM PDT by ken21 (people die and you never hear from them again.)
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To: Porterville
where in the world is 50 trillion dollars?

I don't know. But I assure you, I am not interested in paying that money. Let these banks, insurance companies, and hedge funds, take the loss, otherwise they will do it again.

Only bank depositers should be guaranteed. They can have a govt guarantee, perhaps in a newly set up national bank, if needed, and the rest must just be left to market forces.

10 posted on 09/27/2008 9:26:29 PM PDT by BlackVeil
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To: Porterville

Stinks to high heaven doesn’t it!!!


11 posted on 09/27/2008 9:28:35 PM PDT by org.whodat (Republicans should support the SAM Walton business model, and then drill???)
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To: cherry

We have to just let it all crash down, I’m afraid, and simply start all over from bedrock honest priciples.

If I’m wrong, and the best thing is to rescue the addicts, it seems all we are doing by bailing out and band-aiding the catastrophe is perpetuating the socialist boondoggle that will nonetheless come to a day of reckoning, a collapse sooner or later.

Why not get back to basics now? If it means millions living in hobo camps for awhile, maybe it’s what we have to go through to sober up and stop the shell-game.


12 posted on 09/27/2008 9:30:16 PM PDT by VigilantAmerican (We will not waver, we will not tire; we will not falter, we will not fail)
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To: Shermy
One difference — the Treasury has to follow laws and regulations and such.

Heaven forbid, are you suggesting that the gods of wall street actually follow laws, they are only for the little people you know. LOL

13 posted on 09/27/2008 9:30:20 PM PDT by org.whodat (Republicans should support the SAM Walton business model, and then drill???)
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To: BlackVeil
Only bank depositers should be guaranteed. They can have a govt guarantee, perhaps in a newly set up national bank, if needed, and the rest must just be left to market forces.

I do believe that is the way it is currently set up. I agree 1000%.

14 posted on 09/27/2008 9:32:03 PM PDT by org.whodat (Republicans should support the SAM Walton business model, and then drill???)
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To: Porterville

ping for later


15 posted on 09/27/2008 9:32:53 PM PDT by Freedom56v2
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To: Porterville

They sure aren’t with the people. They are greedy and they just don’t care if they destroy America or not.

If they bailout, it will unravel. They need to take that money and pay down the debt.


16 posted on 09/27/2008 9:33:57 PM PDT by freekitty (Give me back my conservative vote.)
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To: Porterville

Bank of International Settlements states total notional credit derivative instruments world wide are over a QUADRILLION noww...most fantastic destructive bubble in all history. The credit default swaps, big enough to sink us, are only around $60 trillion. Here is an excerpt from a couple of months ago from Jim Sinclair of www.jsmineset.com on derivatives..

“The notional value of all outstanding derivatives now totals approximately $1.144 QUADRILLION.

This appears to be Bank of International Settlement Spin to announce the largest gain in derivatives outstanding since they started to report. As of the last report it appeared that both listed and OTC derivatives was under $600 trillion. Now listed credit derivatives alone stood at $548 Trillion. The OTC derivatives are shown as $596 billion notional value, as of December 2007. One can only imagine what number they are at now.

Well we hit a QUADRILLION. We have more than $1000 trillion dollars in all derivatives outstanding. That is simply NUTS because notional value becomes real value when either counterparty to the OTC derivative goes bankrupt. $548 trillion plus $596 trillion means $1.144 quadrillion.

It would be an interesting piece of research to see what the breakdown is of listed derivatives according to exchange to see if it adds up to the reported number. Spin is now everywhere.

This means that no OTC derivative house can be allowed to go broke. This means that whatever funds are required to rescue failing international investment banks, banks and financial entities will be provided.

Keep this economic law in mind. Monetary inflation proceeds price inflation and is its primary cause in economic history from Rome to present.”


17 posted on 09/27/2008 9:36:40 PM PDT by givemELL
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To: givemELL

Wow. I am sick.

There will soon be major geo-political shifts.


18 posted on 09/27/2008 9:39:35 PM PDT by Porterville (Im no economist- getting a PHD in economics wasn't economical... it didn' make cents.)
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To: Porterville
Under a CDS, a bank originates loan to a company. A second bank (or other financial institution) can agree to cover the credit risk for the loan, by agreeing to make payment to originating bank if the company defaults on the original loan. The originating bank pays a small insurance premium to the second bank for assuming the risk of the loan.

Sooo... what happened to the insurance they paid a small premium on?

19 posted on 09/27/2008 9:40:55 PM PDT by OCC
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To: freekitty

I’m going out on a limb and blaming Greenspan and Rubin.


20 posted on 09/27/2008 9:41:25 PM PDT by pacpam (action=consequence and applies in all cases - friend of victory)
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