Derivatives: Darth Vader's Revenge
An SI Board Since August 1998
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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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2609 Past enforcement suggests proposed "clawback" rules lack teeth Sam-last Monday
2608I am sure that this guy is speaking the truth and C executives are engaging in aSam1September 11
2607An excellent read, thanks for posting.... I can't see a point that I disagrggersh-September 6
2606Very long... Perhaps the most incisive and complete examination of the great diWorswick2September 6
2605Jesse... 29 August 2015 ggersh-August 30
2604WMD's still growing Message 30208297ggersh1August 27 Picking Apart One of the Biggest Lies in American Politiggersh1August 21
2602The wunnerful private sector Big Banks are moving their derivative trades to LonSam1August 21
2601The Great China Ponzi— -An Economic And Financial Trainwreck Which Will RattlWorswick1August 14
2600A trillion dollars is NOT what it once was..... 1,922 publicly traded companiesThe Ox-August 7
2599In answer to yours Jim ... This is laid out in a very, very simple manner andWorswick1August 6
2598The Few Who Won't Say 'Sorry' for Financial Crisis ' The exceptaxial3July 27
2597"... but these moves will be largely symbolic" Probably true. Additioaxial1July 22
2596 Private Wealth Advisory... July 22, 2015 Read This If You Think The Fed Worswick2July 22
2595thanks..Grood about the same time the upturn began in debt, came the see clearly now-July 22
2594Hi scn - There's much to be said for your reply, though perhaps this forum iaxial-July 22
2593I wonder if its could be 'falling together in a new way'? . you can now see clearly now-July 20
2592Clark, it's difficult to say anything new about the parade of events -- not axial1July 19
2591More and more this thread appears quite brilliant. SEE THIS: A walk perhaps tWorswick4July 17
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2588First, anything stated by GS should be taken with a truckload of salt. The primaxial6July 11
2587It is always strange to me how many people listen to Diane Rehm Sam given her pWorswick-July 11
2586There are always enabler's salon.comggersh2July 7
2585<i>In reality, nobody had put a gun to Greece's head and told it to lSam2July 7
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