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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: Brom who wrote (36184)	4/26/1999 12:52:00 AM
From: Bonnie Bear	Read Replies (1) \| Respond to of 86076

I have a copy of Fortune dated March 7, 1994 Cover "The Risk That Won't Go Away- Financial Derivatives are tightening their grip on the world economy. And nobody knows how to control them." At that time the article cites the notional value of outstanding derivative contracts at $16 trillion versus a $6.4 trillion U.S. GDP, and also cites their use to create growth rates of 40% a year. The prescient article predicts the most problematic risk as hedge funds, and offers the scenario where a systematic contract default would put deposit-insurance funds and taxpayer money at risk (boy did they call that one right!) The article lists the top 20 derivatives banks and most are foreign banks doing offshore business. The feds are clearly in a rocky spot now, five years later, they can't raise interest rates because the chain reaction will cause systemic collapse, the only thing they can do is try to add or remove dollars from the system, they are controlled by an offshore mafia called the Nasdaq, which I suspect is just a proxy for the volume of derivative contracts, and Microsoft just happened to put itself in the right place at the right time to profit from it. Some pretty sharp people on Wall Street are saying things like "the world as we know it will end Jan 1 2000" because there's a real fear that somebody will use Y2K as an excuse to go bankrupt and set off a chain reaction of derivative contracts, stock and corporate bond values will collapse, people will rush to treasury bonds and gold coin because everything else is defaulting. Could it happen? It's possible.