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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (79743)	3/15/2008 11:18:09 AM
From: Real Man	Respond to of 94695

No, not relative to notional value, since only interest rates flows count. However, if one side of the swap agreement can't pay, this is a default. The problem is anecdotal evidence of treatment of swaps and hedging of these instruments. They just pile up on someone's desk and sit there for MONTHS. I could not believe it, but that seems to be the truth.

To: robert b furman who wrote (79743)	3/15/2008 11:40:16 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

11 Trillion real value for the leveraged derivative instruments is way too high, this derivative bubble has to collapse. It is NOT a norm that US stock market is now driven by options and futures markets. The volume is also extreme - secular bottoms are very quiet and gradual, no volume. This can't grow to infinity. It can take down a large percentage of US financial institutions with it. The bullish scenario is a fast BK type collapse, including the dollar, very painful, but clears the system, however much lower the DOW may be. The next recovery then is a REAL one, driven by vastly increased jobs in US manufacturing (which remained in a bear market for decades!) The bearish scenario is the Japanese - insolvent banks are allowed to be walking dead for decades.