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

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To: TobagoJack who wrote (89287)	4/20/2012 4:40:51 AM
From: elmatador	Read Replies (1) of 217543

Derivatives as insurance. I want to build a GSM network in Iran. You're supplier of equipment and I need credit to launch. You agree to sell and give me a credit line of say $70 million. You only gave credit to me because your bank agreed to insure that debit for a fee and sold a derivative contract. If I don't pay TJ, bank pays TJ. Bank seats quietly. Does not need do anything. My network is launched I start paying back TJ. I need to tap the credit line for more money to expand it and that'll work the same way above. As you can see the derivative mechanism allows for real things to exist. That tower of money cannot be destroyed at once. And here is how: Say when debt comes due I don't pay TJ. TJ does not only go to the bank as ask for his money. Immediately it tight the screws on my tomatoes: pulls out tech support engineers and stop supplying spares and upgrades for my network. I know that, and that makes me keep paying TJ as agreed on contract and TJ as an experienced supplier knows the ins and outs of such deals. And it was on this belief that bank isnured TJ's credit to Elmat.

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