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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Riskmgmt who wrote (31251)	3/18/2008 10:28:29 AM
From: TobagoJack	Read Replies (1) \| Respond to of 218147

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

To: Riskmgmt who wrote (31251)	3/18/2008 2:22:12 PM
From: stan_hughes	Read Replies (2) \| Respond to of 218147

"If BSC is indicative of the amount of leverage other financial institutions and brokers are using..." "If"???? -- that's where they've been getting all their money for years now Here's a read for you -- it should keep you busy for maybe an hour until you reach for the Sell button -- occ.treas.gov The whole document should be read, but I would draw your special attention to the Tables at the back (page 21 onward). If that doesn't turn your jockeys brown, nothing will -- it's just an enormously under-capitalized default waiting to happen at this point