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Gary Edwards

ACTA The Size of Derivatives Bubble = $190K Per Person on Planet - 0 views

www.siliconvalleywatcher.com/...the_size_of_der.php

acta foremski financial-crisis cds credit-default-swaps politics economy banksters

shared by Gary Edwards on 24 Nov 08 - Cached
  • Gary Edwards on 24 Nov 08
     
    The Invisible One Quadrillion Dollar Equation -- Asymmetric Leverage and Systemic Risk According to various distinguished sources including the Bank for International Settlements (BIS) in Basel, Switzerland -- the central bankers' bank -- the amount of outstanding derivatives worldwide as of December 2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories of the USD 1.144 Quadrillion derivatives market were the following:
Gary Edwards

The Four Scenarios: Debt Deflation, Hyperinflation, Quadrillion Play and Muddle Through... - 0 views

www.siliconvalleywatcher.com/...saturday_post_a.php

acta foremski cds credit-default-swaps finacial-crisis politics economy

shared by Gary Edwards on 24 Nov 08 - Cached
  • Gary Edwards on 24 Nov 08
     
    From the vantage point of November 15th, 2008, whilst the Washington, DC, summit is underway amongst the leaders of the G20 nations, it would appear that there are four distinct global economic scenarios that may unfold towards the tail end of this year, 2009 and 2010:
Gary Edwards

ACTA Open Must Read Analysis: Why Markets Are Still Falling . . . The Shadow Financial ... - 0 views

www.siliconvalleywatcher.com/...analysis_why_ma.php

acta foremski cds credit-default-swaps finacial-crisis politics economy

shared by Gary Edwards on 24 Nov 08 - Cached
  • evidence suggests more credit default swaps are traded in London than in the United States according to the US Federal Reserve, so US action alone cannot address perceived problems.
  • As corporations, home owners and credit card holders go into default -- stop making payments -- many financial institutions are being hit twice on their balance sheet -- once by the bad loan and then by the associated CDS default or obligation.
  • CDS trading has expanded 100-fold since 2001 as financial institutions including insurance companies and hedge funds as well as investors have used the contracts to protect against bond losses and speculate on companies' ability to repay debt.
  • ...4 more annotations...
  • Chicago Mercantile Exchange
  • Lawmakers are also considering the introduction of new regulations to curb CDS abuse as engines of speculation, but many financial experts are also encouraging the creation of public exchanges for these shadow markets. An exchange would establish an arms length price. As that price was transparent and moved, the market would see that a credit was deteriorating. A centralised clearing market would help shine a clear light on these transactions and since every trade would be backed up by the members of the clearing house, chances of default would greatly be reduced.
  • Unlike most financial markets, credit default swaps are unregulated and at USD 54.6 trillion, they are one of the largest unregulated markets in the world.
  • In response to the coming derivatives and deleveraging Tsunami, which has already begun, the world GDP may have to shrink drastically -- some estimates suggest between 30% and 50% -- over the coming years of The Great Unwind. This is the severe recession the markets fear as they go into free fall.
  • Gary Edwards on 24 Nov 08
     
    Why are Markets still Falling? The Tsunami caused by Derivatives and Deleveraging The invisible elephant in the room causing continuous falls in global financial markets is the link to the privately traded Credit Default Swaps (CDS) and the financial uncertainty they have created whilst synchronised deleveraging takes place across the world. ... Credit default swaps are unregulated financial derivatives which act as debt insurance on risky assets like mortgages, corporate and government bonds. But unlike a normal insurance policy, financial institutions that sell credit default swaps are not required to have enough funds in reserve should those risky loans turn bad. Since the US Congress in 2000 declined to regulate these contracts as it does insurance, the companies that guarantee the assets are not required by law to keep enough capital on hand to pay them off in the event of a default.
Gary Edwards

ACTA Beyond The Sub-Prime Bubble: The Other Seven Deadly Bubbles . . . - 0 views

www.siliconvalleywatcher.com/...beyond_the_subp.php

acta foremski cds credit-default-swaps politics economy finacial-crisis

shared by Gary Edwards on 24 Nov 08 - Cached
  • Gary Edwards on 24 Nov 08
     
    There is a rising myth of the single bubble which suggests that The Great Unwind -- manifest as the global credit crunch -- is essentially about subprime mortgage default, a USD 1.5 trillion challenge. The truth is that there are as many as eight bubbles at play which are in the process of bursting, taking the form of deleverage on an unprecedented scale. Even 1929 pales in comparison. At a recent ATCA roundtable we posed the following questions for Socratic dialogue:
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