Do we know for sure that the leveraged debt is higher than 1929? I don’t think we know that for sure? Do you know? Any inkling?
Without a doubt, the $60 trillion in credit derivatives appears to be massive on the face of them and I have no clue what real affect they will have on the world’s economies or if they are even payable. Maybe $55 trillion will end in default and the counterparties will just sulk with their tails between their legs and get their yachts repossessed.
I just don’t know if the $62 trillion in debt will have the effect of an honest $62 trillion in lost world GDP. I can’t see it.
So I FEEL the scale of this crisis is huge, but I can’t get my teeth around it and I am very confused if we are better or worse off than 1929. I just don’t know.
Given the same amount of time, the number of transaction that can be executed is many time larger now than it used to. It is much easier to locate the party who wants to trade with you.
Even with the same leverage ratio for single transaction, this will allow you to build much higher leverage pyramid.