Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: dybdahl who wrote (82311)	10/22/2008 6:49:25 AM
From: Paxb2u	3 Recommendations Read Replies (1) \| Respond to of 94695

dybdahl----I hang out at this board because of its value to me and the respect people have for each other here. If you cannot explain your position w/o showing your lack of wisdom and respect, suggest you go to another board that appreciates it more. Thank you and Peacb2u

To: dybdahl who wrote (82311)	10/22/2008 7:45:26 AM
From: carranza2	2 Recommendations Read Replies (1) \| Respond to of 94695

Just summing the size of contracts is actually plain stupid: If A borrows x from B, and B borrows x from A, the sum of the contracts is 2x, but the sum to the outside world is zero. Tell that to Lehman, AIG and Bear Stearns. Tell that to banks that have been terrified to lend for fear of counterparty risk. Tell that to the TED spread for the past few months. Your focus is stupidly narrow. Derivatives risk hits unevenly; some institutions get hit harder than others for none of them set it up so that their positions were perfectly balanced. See, e.g., Lehman, AIG and Bear Stearns. And when it hits the fan for those who carry more risk than others, collateral damage is done throughout the system. And that is why it matters. Have you, uh, noticed? Or have you been asleep for the past 3 months? Using your 'logic', the bailouts were not really necessary, the past few months were a dream.