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My Bad - Not 600 Trillion Rather 415 Trillion

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My Bad - Not 600 Trillion Rather 415 Trillion

Unread postby Roccland » Mon 13 Aug 2007, 17:43:07

Not that it is really gonna matter...

Financial Sense

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$this->bbcode_second_pass_quote('', 'D')anger #1

The Sheer Enormity of the Derivatives Market

In its latest survey, the Bank of International Settlements (BIS) calculates that the total "notional" value of all derivatives outstanding in the world is a mind-boggling $415 trillion.

That's over eight times the GDP of the entire world economy … twenty times the total value of all U.S. stocks … and fifty times all the Treasury debts of the United States Government.

The fear: That any unexpected disruption in this $415-trillion market could throw the world's financial markets into turmoil … bankrupt hundreds of hedge funds … wipe out the profits of big-name financial institutions … sabotage the investments of pension funds … and scramble the portfolios of millions of average investors.


There are more listed dangers, but here is the conclusion ...

$this->bbcode_second_pass_quote('', 'T')his means that …

Even though Wachovia has the least exposure to derivatives among the top five, it is still extremely vulnerable — with more at stake than its entire capital.

America's largest bank — Bank of America — is also embroiled up to its eyeballs, risking over FOUR times its capital.

And the single largest player in the derivatives market - JPMorgan Chase - is taking the most risk of all: EIGHT times its entire capital, according to the OCC's data.
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Re: My Bad - Not 600 Trillion Rather 415 Trillion

Unread postby Tanada » Sat 25 Aug 2007, 18:19:27

All these bubbles right on the burst point. I think the economic effects of the bubbles could mask PO for the forseeable future.
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Re: My Bad - Not 600 Trillion Rather 415 Trillion

Unread postby NEOPO » Sat 25 Aug 2007, 18:43:03

Yeah it is just a natural symptom of a natural disease, thats it... 8)
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Re: My Bad - Not 600 Trillion Rather 415 Trillion

Unread postby Tanada » Sat 25 Aug 2007, 18:49:27

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('Tanada', 'A')ll these bubbles right on the burst point. I think the economic effects of the bubbles could mask PO for the forseeable future.
Tanada, I am profoundly ignorant regarding finances but isn't it likely these collapsing bubbles are really just symptoms of Peak Oil?

Given the strength of 1st world and emerging consumer demand, the efficiency of the global marketplace, and the proficiency of our manufacturing and distribution system, isn't it really logical and reasonable to expect investment today to grow exponentially?

If the cornucopeans had been correct and there was unlimited energy (as well as other necessary minerals, metals, resources etc.) wouldn't all these financial tools be reasonable facsimiles of future wealth?

Doesn't Peak Oil play out exactly like this? All of a sudden growth-dependent investments shrink, dragging down other growth-dependent investments?


I don't beleive this is the case for one simple reason. For these bubbles to be reasonable expectations of future growth they would have to be tied into that growth. What we have instead is rampant speculation not tied to anything of value nor to any reasonable growth scenario even if PO doesn't happen until 2024.

The real world can not grow at anything lie the pace these bubbles have, the real world can not handle such rampant expansion over the course of years. Check out the deer on St Mathews island model, the difference is in economic/theoretical models only faith in a brighter future is needed to make them grow. As soon as that faith wavers they collapse like popping soap bubbles, hence the name.
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Moved earth and heaven, that which we are, we are;
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Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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