Posted on 09/27/2008 9:13:31 PM PDT by Porterville
Here is the official Bank of International Settlements credit derivative data for 2007 by class of derivative....these are pdf files, and, take a little time to review...they will astound...http://www.bis.org/statistics/derdetailed.htm
Part of this mess started with Carter (and was exacerbated by Clinton).
I assume the Government has not figured out a way to tax this "money"?
~~"Only Yesterday: An Informal History of the 1920’s" by Fredrick Lewis Allen
Without any hyperbole....
But who is participating in the derivative bubble, and if they made all sorts of funny money on paper, then so what if it never becomes real?
It becomes REAL in a CREDIT CRUNCH when the short interval rollovers cannot be FINANCED...the current crisis...and, the defaulted instruments hidden in level 2 and level 3 statements on bank statements have to be repossessed and, REPORTED AS LOSSES...the potential LOSSES exceed the capital reserves of the banks. All G7 countries are heavy participants in the derivative markets. The $700 billion of the current bailout bill is completely inadequate to prevent the derivative meltdown..relief is only temporary.
Bump for later read
Don’t blame Greenspan. Believe it or not it was Clinton and his risk taking that did it. Greenspan inherited the problem and did the best he could.
Remember Bill Clinton, the man that had Bin Laden and let him go?
It appears that the present mortgage finznce crisis is the tip of the iceberg...
...and this is the iceberg.
And are all these insurers “American” entities?
Anyone? Anyone?
It appears that the present mortgage finznce crisis is the tip of the iceberg...
...and this is the iceberg.
And are all these insurers “American” entities?
Anyone? Anyone?
People are finally beginning to understand. Thank you God...
Folks, protect your families. Get some cash-on-hand that will last you at least one month. Same goes for food.
The elation coming early next week won't last.
“Sooo... what happened to the insurance they paid a small premium on?”
I imagine it is like car insurance. Allstate probably has figured that 1 out of 1000 cars gets totaled every year or something. And they make money by getting $40 from all the 1000 to cover the $30,000 car of the one. (And “keep” $10k).
Same thing here I suppose. Except imagine one of those huge dust-storms in California and 800 cars pile up and wreck.....x10000.
Thanks for the ping. Looks complicated, but absolutely necessary to know ... and to see that others know (especially by November 4th) as well.
Later --
~ joanie
No...and please understand that it is the 'insurers' that get hurt.
This problem will devastate the G7 economies.
My point though, is that if these insurers are not under American law, what is keeping them from just shell gaming and walking away?
You know -- like State Farm Insurance after Katrina.
don’t worry bailout is the answer for everything...
The ‘29 crash bottomed in 1933...it was an ‘L’ shaped depression, interupted by the war, and did not have the confirmed ‘uptick’ until 1947. In the depression the govt, and, the Fed Reserve were not broke..they are now. We were industrialized and could produce labor valued products...no longer. A depression now will be ‘L’ shaped also for a much longer period of time. Since 1971 we have been a ‘debt Capitalist’ economy, meaning that all money in circulation must be borrowed. We cannot borrow very much now or in the future. Hyperinflation will go along with the deflation we are experiencing now. The housing bottom has to occur later than 2011 when the last Alt As peak...along with prime mortgages, a problem 5 times bigger than the sub primes. Outlook, world depression unavoidable...tens and humdreds of trillions in derivative defaults cannot be dealt with by billions. Hedge fund redemptions begin in earnest in Dec., then every quarter to follow. Trillions will be attempted to be redeemed from hedge funds in 2009 to no avail. Hedge funds are completely unregulated worldwide and cannot meet redemption demands. The SECs Cox, notes that regulation of the credit default swap derivatives mus occur IMMEDIATELY (they are about $62 trillion of the worldwide over Quadrillion credit derivative instruments)...lots of luck. Lehman Bros. was the dominant investment bank related to credit default swaps....such swaps are now known to be probably valueless as there is no market if they have to be liquidated. What people do not realize is that Paulsons proposal is to bail out foreign banks also, and that Fortis Bank in England is bankrupting this weekend. The Brit PM Brown is in the US now, if he has not already returned to Britain, requesting $100 billion from Paulson from the Bailout Bill, when passed, to bail out Britains acute need NOW...I do not know the result.
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