[bert]

-——to trigger even a small fraction of the 340 Trillion in notational value of interest rate swaps, -—

That sentence is beyond my capacity. What is notational value of interest rate swaps?

We learn by asking

[djf]

As far as I understand it, the notational amount is the total amount of debt covered by interest rate swap protection.

So if it was all covered at a time when say the prime rate was five percent, and the prime went to seven percent, somebody would be on the hook for 2 percent times 340 trillion.

Personally, I think they found a way to leverage it even farther than that...