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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (11854)	9/26/2008 12:42:42 PM
From: dybdahl	Read Replies (2) \| Respond to of 71454

So you say that interbank trade IS derivatives, and that if the central bank replaces the liquidity formerly delivered between banks themselves, everything is ok? To me, it sounds as if you are contradicting yourself. Sorry for keeping digging into this, but I'm trying to understand why your view is so much different than many others. Usually I see only two reasons for different opinions: Different access to facts, or different judgement. Right now, it seems that the difference in opinions is based on different access to facts, and if that's true, I'd like to see the facts that make you argue like you do.

To: Real Man who wrote (11854)	9/26/2008 2:37:41 PM
From: benwood	Read Replies (1) \| Respond to of 71454

Why do they write off what they don't collect? Their balance sheet hasn't changed at all, has it, except the cost of the contract. Is that what you mean? Seems like you have them making a write off for something they thought they'd have, contracted to have, and then didn't get, like if they were trying to take over a bank, and then the deal went south. e.g. say they have assets of $100, and they buy a contract for a dollar which entitles them to collect $101 from the counter party at maturity. If paid: assets are $200 (net gain of $100) If the counterparty goes bust and does not pay them, assets are $99 (net loss of $1) You seem to be suggesting that they'd report a loss of $101 and that their assets are $-2 when in fact they still have assets of $99. ?? (yes, I may be a real idiot). edit: perhaps they'd report a gain of $100 (gain from contract) and a loss of $101 (counterparty failure)??