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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 387.24

-0.6%

Dec 2 4:00 PM EST

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To: Riskmgmt who wrote (31251)	3/18/2008 10:28:29 AM
From: TobagoJack	Read Replies (1) of 218156

the trouble with 'notional' is that, just for example - 45 tril of notional value in corporate default swap derivative - assuming 5% default rate, then require 2.25 tril cash pay out - do you know any group of financial institutions, except the fed reserve that is 45% owned by jpm, and j6p tax payer, with 2.25 tril cash sitting around? try another number, assuming 500 billion equity gets wiped out from usa banking system, then, at 10:1 leverage, 5 trillion of loans would have to go poof - do you know any asset class that can take a 5 tril sell-down so that 5 tril of debt can be called in? we have never been here before

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