Derivatives: Darth Vader's Revenge
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Emcee:  Worswick Type:  Unmoderated
According to informed sources as of March of this year the Long TErm Credit Bank of Japan had approximately 50 trillion yen of derivative contracts $725 billion dollars as of the exhcange yen/dollar currency rates of August, 1998.

Now that LTCB is finally acknowledged to be broke what has happened to this exposure? Has $725 billion dollars gone to money heaven?

One worries.

What does this portend for our own banks where all derivative contracts appear to be cross linked?

Is the global financial system about to be swamped with between $100 trillion and $500 trillion in unresolvable derivative contracts?

Where does one hide in this scenario?

According to the Federal Reserve Bank of New York...."activities in the 1996 annual reports of a sample of the largest, internationally active banks and securities firms in the G-10 countries, and notes improvements since 1993. The analysis builds, in part, upon a framework used by the Federal Reserve in analyzing the trading and derivatives disclosures of major U.S. banking organizations.

In total, 79 major banks and securities firms in the G-10 countries comprised the sample reviewed for the 1993-1996 period, representing over $14 trillion in total assets and over $83 trillion in notional amounts of derivative instruments. Disclosures in the 1995 and 1996 annual reports of a major securities firm in Hong Kong were also reviewed.

The analysis revealed that there have been general improvements as well as voluntary innovations in the annual report disclosures of a number of the surveyed firms. In particular, there were notable improvements in quantitative disclosures about market risk in 1996 and 1995. However, despite encouraging advances in disclosure practices by a number of institutions in the G-10 countries, many institutions continued to disclose very little about their trading and derivatives activities".

Please See:

...for the full text of the 37 page report and the abstract.

Personally, I am worried about this.

I am surprised that a discussion of one of the most pressing questions of our time.... has not been addressed sooner.

Thanks for your consideration and, I hope, interest.

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2669Never seen it put like that, but ya it's time for Yellen to go in SWAP mode.ggersh1September 27
2668AH, YES TIME TO POST AGAIN Deutsche Bank on the buffers. .... it is probably tWorswick3September 27
2667I'm not sure that this belongs on this thread, but it has to do with bankingSam-September 14
2666Riding the Pestilence .... Everyone ready to rock and roll? Worswick-August 8
2665China, welcome to the world of derivatives. wsj.comggersh-August 4
2664China, welcome to the world of derivatives. wsj.comggersh-August 4
2663No worries......of course and then one wonders why the Brits chose Brexit of couggersh-July 10
2662Many thanks for the graph.... which refers to this .... of course when the countWorswick1July 10
2661 [graphic]ggersh-July 10
2660Let's see.... According to some sources world derivative exposure is now a Worswick-July 10
2659Amazzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzing ...! A Furious Italian Prime MiWorswick-July 6
2658The only fundamental is the "CB's" ggersh-July 3
2657Barexit .... stunning. From Yves Smith, Naked Capitalism. Work through the tortWorswick-July 3
2656One sometimes simply has to blink, and then stare at what you've just read .Worswick2July 3
2655I must say this is getting very incoherent, very strange.... First, out there Worswick-June 28
2654 IT's now all 'dog shit' according to Kunstler "The next stagsee clearly now1June 27
2653 6.26.2016 .... look at the capital fleeing derivatives like sovereign credit Worswick-June 26
2652The Big Kahauna? Private Wealth Advisory... June 21, 2016 Forget the BREXIWorswick-June 22
2651Rarely if ever have I dipped into the foul and polluted waters of global credit/Worswick-June 2
2650The team could be back in place. -nfg- After Distancing Heggersh-May 17
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