[RightWhale]

The dominos are teetering. And all because of California's power problem last year.

[stylin19a]

The tip of the iceberg might go back to the LTCM hedge fund bailout of 1998. Looks like another bailout in the works. I believe the Bush administration has to plant this stuff squarley where it belongs...on the Clinton years, or it WILL come back to bite them.

[staytrue]

The dominos are teetering. And all because of California's power problem last year.

Most institutions use derivatives so they can do something risky, make a lot of money, and lay off some of the risk and profit to someone else. Use of derivatives are excellent vehicles as long as markets remain in "normal" conditions. Normal means within 2 std deviations of past behavior. The US banks have deravatives totalling over 100 trillion dollars (that is trillion with a t) in notional value. Long term capital management tried this in 1998 and almost blew up the world's financial system because their models did not include russian debt default and the asian currency crises as possiblitilties. A lot of these derivatives are outside normal conditions and are possibly ready to blow up. If I'm scaring you, I'm already scared.

[snopercod]

The dominos are teetering. And all because of California's power problem last year.

I'm not sure what you are implying. Are you proposing that the Enron debacle caused banks to buy derivatives?

Please elaborate.