The coming US dollar crisis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The coming US dollar crisis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: LTK007 who wrote (11152)	9/16/2008 5:25:12 PM
From: Real Man	Read Replies (2) of 71463

Derivatives are a zero sum game. That means someone owes $1 billion to someone else and defaults on OTC contracts, while the bond spreads widen. Nevertheless, it can get VERY UGLY, because when someone who owes somebody else $1 billion can't pay it, that will cascade through the system and hike spreads (and rates) for everyone. It has been happening all year, although, so far, backstopped by the Fed to a degree. TED spread has been uglier than after 1987 crash. When someone owes $10 billion and can't pay, then, multiplied by the leverage factor of 40, $400 billion evaporate from the broad money supply. Stock market has yet to catch up with the absolute murder we've been seeing in the credit market.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next