Posted on 11/10/2008 7:11:54 AM PST by TigerLikesRooster
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This has been the elephant in the room that is just getting some attention....
I don’t know if you are on TLR’s list but, ping.
Important to remember these are notional values, not market values. In other words, notional is the multiplier you use to find total market value. In CDS or options, for instance, the actualy market value (net present value) will be a small % of notional.
I can almost hear the laughter.
I don’t know about the scariness here. The currency market is larger than all other markets combined and the most liquid. Lots of “derivatives” in the foreign exchange market in the form of hedges against currency moves. Not at all similar to sub-prime lending derivatives.
In this case the couch is most likely to be “Republican policies of the last 8 years that have lead to massive problems with financial instruments”....
I smell a Democrat behind all of this.
This what happens when you take a bunch of spoiled kids from the Ivies to manage trillions of dollars worth of transactions.
They thought they could have morons with only a liberal-arts college degree and a good name into a mathematical genius that can accurately price risk. They thought wrong.
We have genius economists who knew what is going on and who have reported over the years to Congress. This whole thing was allowed to go bad so that the Dems could step in and ‘save the country’. The illusion being presented is that this was unforseen and unavoidable.
This news is all one month old. In the meantime nothing has been fixed but various bankruptcies have been postponed with loans. That's good and bad: prevents the derivatives meltdown, but it also keeps the economy hostage to insolvent banks.
We have genius economists who knew what is going on
-— in fact, one of these geniuses, Krugman, just was awarded the Nobel prize for economics, and is working with Obama now.
I am the least worried about currency derivatives. This is the interbank market, which is the biggest, most liquid, and most importantly, the most accurate “marked to market” center for financial instruments in the world.
They have been doing derivatives before they were called derivatives. IF (big IF) there are any markets out there with a true net zero sum (all the derivatives cancel each other out, the way derivatives are supposed to do) it would be this one.
Easy. Since it’s fiat money, just print 596 ‘one trillion’ dollar bills. Or 60 ‘ten trillion’ dollar bills and have 4 trillion extra in change.
Gotta love fiat currency. Money out of nothing. WHOOO-HOOOO! I mean, “D’OH!”
Obama Wins, Economy’s Doomed:
Peter Schiff, president of Euro Pacific Capital and author of ‘The Little Book of Bull Moves in Bear Markets,’ says a big-government Obama administration will lead to an economic collapse on par with the Great Depression.
Sun 11/09/08 04:59 AM EST — Gregg Greenberg
Check the video linked below to really make your day, week, month, year, decade:
Thanks for the ping.
There's not enough money in the world for a "bailout". Let this bubble burst, then selectively pick up important pieces...
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