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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (9159)	5/1/2008 9:17:26 PM
From: John Pitera	Respond to of 33421

Hi Stan, thanks for hitting a home run in my opinion. Although the 500 Trillion dollars is much more likely the notional value of the Derivatives market, or at least the Credit Default Swaps Market. I have studied this at length and at the end of Q3 of 2007 it appeared to be a $45 Trillion dollar market of actual exposure. i Know that I have mentioned that number on this thread prior to this year's February Davos Switzerland meeting where (pretty sure of this attribution) George Soros and Lawrence Summers cited the 45 Trillion Dollar actual underlying market value of the Global Credit Default Swaps Market. My analysis, that should statistically have a very small probability of being accurate; shows a total of 10 Trillion Dollars of contraction in the Credit Default Swaps market. But I am due some credit, for being on the front end of this curve in articulating the credit derivatives implosion which I believe is just beginning to re accelerate. However, I do believe that we have about a 10 Trillion dollar contraction in these instruments and then we bottom out at 35 Billion and have an uncomfortable economic climate of sector related inflation/deflation; currency adjustments; yield sovereign yield curve re-adjustments---- and a topping out of the spread of Triple AAA - vs. bbb rated debt instruments. ....... how is this dealt with..... to be continued..... ie..... notional value Definition The value of a derivative's underlying assets at the spot price. In the case of an options or futures contract, this is the number of units of an asset underlying the contract, multiplied by the spot price of the asset. Cite this definition investorwords.com