Posted on 12/08/2014 10:10:30 AM PST by SeekAndFind
The Chicago Futures Exchange guarantees the integrity of the contracts and insures the liquidity of the market.
If you get a margin call, your collateral is still adequate to cover your losses, but not sufficient to meet margin requirements. If you are sold out, you lose the money you put up against the loss, and your contracts will be sold at the exchange market price. In other words, they don’t wait until you’re in a negative position to close you out.
In any case, the main point of my comment is that the banks don’t have a dog in this fight. They hold the contracts for the real owners, and deliver them as instructed. They don’t own them, and make their money by charging custody and transaction fees.
It has been noted on several web sites that Wall Street is now pushing Congress to have tax payers bail them out when the Derivatives Market collapses. Either way, the tax payer will be once again screwed over by the criminal elite. Good thing the DC politicians have a tax payer built subterranean fortress they can escape to, once the SHTF their lives aren’t going to be worth squat.
Pigs get fat.
Hogs get slaughtered.
[ Oh darn! I haven’t stacked enough beans and bullets yet. ]
You forgot Rope, there is going to be a need for Rope and lots of it....
The oligarchs and their minions that created this mess are going to need some new neckties....
Those gold futures are getting tough to sell ...
There was a freeper recently (forget his/her handle) who explained derivatives fairly well and that it would not be the total chaos we continually read so much about. I won’t do any good trying to explain what they did, hoping someone here recalls that post and can ping that freeper.
Idiotic article. The vast majority of derivatives contracts zero out.
Imagine if some new Player made $3.9 Trillion and the Too Big Too Fail banks actually failed?!
I’d throw a damn party. Then say hello to the new Trillionaires.
Why don’t you search on “key word = derivatives”???
Why would the derivatives market collapse? Why would that require a bailout? Wall Street makes money on derivatives (that's kinda why they exist).
considering taxpayers already go screwed by tese same speculators driving up demand. The American publc has benn in a “short” position on gas and oil for half a century.
Speculators drive up demand? Can you explain how?
What losses?
Why else would they be strategizing for a tax payer funded bailout?
I doubt they are.
I hope the big banks all collapse. It is neccessary.
If you have any money in the bank of consequence, it now becomes the CAPITAL of the bank in case of a collapse since November 16th, when the G20 Leaders, Zero included, signed that order.
I do not
I read this stuff and it sounds like the mob laying off NY bets to Boston and Philly to spread the risk.
And then the “sure thing” goes terribly wrong.
The problem is the derivatives being laid off to too many counter parties. The upside is great for everyone.
The downside, not so much.
The downside, not so much.
The derivatives net to zero, whether the underlying goes up or down.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.