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Strategies & Market Trends : The coming US dollar crisis
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To: ggersh who wrote (17010)1/31/2009 11:45:45 AM
From: Real Man1 Recommendation  Read Replies (2) of 71454
 
We'll see.

95 Trillion is notional.

A few hundred million is VAR on their netted portfolio.

The truth lies in the wide range in between.

The fact that 2 Trillion Lehman stuff resulted in payment
of 5 billion is encouraging, the fact that it collapsed the
markets is not.

In the end, the losses
to the system are just from the losses on assets, not
from derivatives. However, derivatives work to magnify these
losses on the downside, just as they worked to magnify the
credit bubble on the upside. These are technically "risk
transfer" instruments that work to stabilize the markets
against minor shocks and to amplify major systemic shocks.
The sheer amount of these should be enough to topple the system.
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