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To: Deo volente
“US$1,140,000,000,000,000 in OTC Derivatives! Where exactly is this huge amount of fortune physically located?”

The figure you note is notional amount. The notional amount of a derivative is nothing more than a plug number against which the payments under the derivative are determined via a payoff formula. The actual credit risk is about 1-3% of the notional, typically (the amount owed by one party to another in accordance with the payoff formula). You should take the time to understand something before commenting public.

155 posted on 10/08/2008 12:31:03 AM PDT by Warlord
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To: Warlord

I merely posted an excerpt from an article. Those comments are not my own, but from the author of the article linked below my post.

I should have made it clearer that those comments were excerpted from the article.


217 posted on 10/08/2008 7:22:24 AM PDT by Deo volente
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