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View Diary: Johnson: Europeans will soon “realize that the euro-as-we-know-it is gone…chaos awaits them.” (250 comments)

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  •  Wrong. (0+ / 0-)

    My point is that people throw out numbers in the trillions, or for dramatic effect quadrillions, and act as though that number has definitive meaning.  

    The problem is that we have no idea how bad, or not bad, the problem is.  

    Many thought the world would come to an end if Greece defaulted because of the CDS's written against it.  Well they did, and it didn't.  

    And I make the point these things should be traded on an exchange...

    Now, please help me with  how we got from there to your tirade about criminal bankers and the drug trade?  You lost me there.   And in many other places....

    •  Derivatives are zero-sum, aren't they? (1+ / 0-)
      Recommended by:
      truong son traveler

      For every winner, there's a loser on the other end.

      So if the derivatives market is so much larger than the GGP, how does that work out?  The math may be fancy, but the simple arithmetic of it simply doesn't add up.

      I contradict myself? Very well then, I contradict myself. I am large. I contain multitudes. - Walt Whitman

      by CharlieHipHop on Mon May 28, 2012 at 07:45:13 PM PDT

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    •  Oh, you'd have to read news stories. (8+ / 0-)

      Think: Racketeer Influenced and Corrupt Organizations Act.

      Why do you keep saying "we have no idea how bad, or not bad" when we do.

      The Bank of International Settlements, which is a record-keeper for these things, says there's $645T in Over-the-Counter derivatives. Just last December they said this.

      So if, when settled, there's a net 10% loss, that's $64.5T. The banking system can't support that, hide that, bury that, or wish it into the cornfield.

      Okay, not 10%? If the loss is only 2%, the dominos all fall.

      And we aren't even guessing what the not-OtC market is, but those who do put it near the same as OTC.

      There's widespread analysis that the Euro is about to undergo, at the very least, major and unprecedented alterations. People are already running on European banks; without the Euro-strategy behind everything all the bankers will scramble to cover themselves first.

      Arithmetic is not a fashion or a theory. This is not another of the things which "no one could foresee."

      The motives of me-first people, and thus their actions, even their rationales, are not difficult to predict.

      People were writing in 2005, following the FBI report of widespread banker fraud in mortgaging, about the bubble, the securities, the derivatives, the bets, that together would surely damage the economy severely.

      Arithmetic then. Arithmetic now. Motive then, motive now. Not unforeseeable.

      The Internet is just the tail of the Corporate Media dog.

      by Jim P on Mon May 28, 2012 at 09:57:10 PM PDT

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