You said :
US$1,140,000,000,000,000 in OTC Derivatives! Where exactly is this huge amount of fortune physically located? This huge amount is actually nothing but some digits stored on some 3.5 inch hard drives within some computers somewhere on Wall Street. That, my friend, is the precise definition of a black hole, a giant mass stored within a tiny space.
What do these digits represent?
This total value of derivatives in the world has mushroomed, by perhaps a factor of ten times in the last five years (estimating wildly.)
Just as the total wagering on the Kentucky Derby can exceed the total worth of the horses running by an order of magnitude or two, similarly the total value of these derivatives can exceed the total value of the underlying securities being wagered on by many times.
And also like wagering on a horse race, it is not logically possible for all bets to become winners (or all losers.) Some bets are the opposite of others.
Unlike bets with gambling casinos or bookies, these bets are not against the 'house' (someone with deep pockets motivated to keep the odds balanced, so they win a little either way.) Rather these bets are between private parties, hence the 'OTC', for Over The Counter, label. Thus there is no way to keep them balanced, nor even any way to know how many there are or between whom or under what conditions. Besides, they are complicated to the maximum extent that hot shot Ph.D. quants driven by ethically challenged and greedy bosses using world class computers can achieve.
Not so much a black hole, as carpet bombing from our entire fleet of B-52's with a mix of radioactive dirty bombs, and more ordinary fusion, fission and moab bombs.
It all makes the dot-com bust of the late 1990's look like the collapsed Beanie Baby craze.