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The REAL Reason Ben Bernanke Leaves a Paperweight on the “Print” Button When His Finger Gets Tired
ZeroHedge ^
| 2/6/2011
| Phoenix Capital Research
Posted on 02/07/2011 1:08:03 PM PST by FromLori
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To: MrDem
"A lot of this is pure hype garbage! Let's see, I am a bank. I have 1000 short soybean contracts and 1000 long soybean contracts on my books. OH MY GOD! A NOTIONAL VALUE OF 2000 contracts X 5000 bushels/contract X the current price of soybeans. THAT IS A BAZILLION!
No not really, the bank is flat, the contracts offset each other." MrDem
Indeed. That's called "zero-sum." Economic non-events...but in contrast to your factual explanation above, some people online want hype! DISASTER! NEWS! SCOOP!
It's the "I'm bored, alone, and want to get my adrenaline-rush on-line" syndrome.
21
posted on
02/07/2011 10:00:59 PM PST
by
Southack
(Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
To: Southack
Yeah, I didn't think so.
Today is a good day to die.
I didn't say for whom.
22
posted on
02/08/2011 6:12:55 AM PST
by
The Comedian
(Muslim Brotherhood = A.N.S.W.E.R = Soros = Obama)
To: The Comedian; Southack; MrDem; MontaniSemperLiberi; DannyTN; screaminsunshine
Zero sum only works if the counter parties, the five banks, have $223.4 trillion in assets.
Here's the assets, in trillions, (rounded up to the nearest 100 million) that each bank shows on its latest balance sheet.
| JPM |
0.0021 |
| BAC |
0.0023 |
| C |
0.0019 |
| GS |
0.0009 |
| HTB |
0.000094 |
|
|
|
|
| Total |
0.007294 |
Unfunded liability 233.4 - 0.007294 ~= 233.4 trillion
These banks committed felony fraud by collecting billions in premiums while lacking the assets to perform. In the end, it's all about performance, therefore Bernanke's greenbacking machine to the rescue.
23
posted on
02/08/2011 6:42:41 PM PST
by
Milhous
(Lev 19:18 Love your neighbor as yourself.)
To: Milhous
*Thank* you for explaining the basics when I don't have the patience.
Today is a good day to die.
I didn't say for whom.
24
posted on
02/08/2011 7:03:56 PM PST
by
The Comedian
(Muslim Brotherhood = A.N.S.W.E.R = Soros = Obama)
To: Milhous
Thanks you saved me the time. And these numbers aren’t the worst of it.
25
posted on
02/08/2011 7:12:43 PM PST
by
surfer
(To err is human, to really foul things up takes a Democrat, don't expect the GOP to have the answer!)
To: Milhous; The Comedian
"Zero sum only works if the counter parties, the five banks, have $223.4 trillion in assets." -Milhous Incorrect. Zero Sum means that the *same* money stays in the economy. Moving the same money between Buyer A and Insurer B is Zero Sum because no wealth was added or lost, just moved.
In contrast, if Insurer B defaults, then no money moved, and the same money still exists in the overall economy (because no wealth was added or lost, or in that case even moved).
In fact, "not having the assets" or defaulting on a contract is the same as if no derivative was ever purchased.
That's why derivatives are economic non-events: they are Zero Sum.
26
posted on
02/08/2011 10:22:51 PM PST
by
Southack
(Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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