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Derivatives: Darth Vader's Revenge
An SI Board Since August 1998
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2703 88 0
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 outstanding...eg. $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: ny.frb.org

...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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ReplyMessage PreviewFromRecsPosted
2703Ah, the true "skinny" ... and the new and not so new interlocking pWorswick1November 4
2702wallstreetonparade.com President Obama stated during this press conference thaggersh-September 6
2701theburningplatform.com No one blinks an eye at $22 trillion in debt, trillion dggersh-September 3
2700Is this yet another bomb in waiting? Surge in corporate debt with negative yielSam1August 30
2699Here we go .... July 22, 2019 Gains Pains Capital Is This What Has Got the FeWorswick4July 22
2698A Bank With $49 Trillion In Derivatives Exposure Is Melting Down Before Our EyesWorswick2July 21
2697Remember this moonofalabama.org ‘If Iran can't export oil no-one in Middleggersh-June 24
2696Escobar: One Quadrillion Reasons Why Washington Fears Iran's "Maximum CWorswick-June 24
2695Ah, time to post again .... Still posting after years here on this thread: Worswick1June 16
2694wallstreetonparade.com By Pam Martens: March 24, 2019 ~ The Office of the Compggersh2March 25
2693After "Irreparable Damage" Warnings, Wall Street Finally Cracks Down OWorswick2March 6
2692Ah, here we re again with previously unknown problems now unhappily marching forWorswick210/10/2018
2691The ongoing now pervasive world wide unraveling ... First the nonsense of ChinaWorswick19/24/2018
2690At Jesse's Cafe jessescrossroadscafe.blogspot.com This op-ed is total rewrggersh-9/9/2018
2689When I click on your link, it brings me back to the SI post. With a pdf link at bruiser98-8/6/2018
2688Martin Armstrong made some very good points a few days ago. The excessive amouncarranza2-8/6/2018
2687Agree, the public only has time for their Iphone sadly nothing else matters ggeggersh-7/30/2018
2686Well that is something to wake the nearly comatose isn't it? We seem to be Worswick-7/30/2018
2685We've reached the quad mark? the leap from tril to quad, at the speed of ligggersh17/25/2018
2684Great interview, thanks for posting it.Sam-6/24/2018
2683 Paul Tudor Jones: Here's why the 1987 crash was an accident wWorswick26/24/2018
2682Heavens a dead thread! Worswick16/7/2018
2681Six months since I've posted .... as the world turns When This Debt BubbleWorswick29/20/2017
2680theautomaticearth.com The swamp that can’t be drained without causing explosionggersh-5/13/2017
2679What could possibly go wrong here? uk.reuters.com U.S. SEC approves request toggersh45/3/2017
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