How can 10,000 pcs of printed paper and a good story be worth 1 million dollars of tinned beans?

How can 9 banks with a total capitial of under $1trillion be exposed to derivative losses of $200 +++trillion?

http://www.businessinsider.com/9-banks-combine-for-over-200-trillion-derivatives-exposure-2012-4

That is why the system needs to change.

Edit  that is now  $290 trillion for just 5 banks

https://www.google.com.ph/search?q=largest+derivative&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb&gfe_rd=cr&ei=TFfLU_SHBeWD8QfyyoC4DA#channel=sb&q=total+derivative+exposure+2014&rls=org.mozilla:en-US:official




http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1389103

As of May 18th, 2011 (the last BIS update available, which covers the period up to January 1st, 2011), the total notional value of all global OTC or over-the-counter (meaning non-exchange traded instruments where there is huge 'counter-party' risk) derivatives is now $601 trillion dollars US.

http://www.bis.org/publ/otc_hy1105.pdf

The actual total is probably closer to $1 quadrillion, as at the end of 2008, both the BIS and the IMF simply changed to a 'value to maturity' model, which is a 'mark to model' method, not the truthful 'mark to market' model for valuing notional derivative contract value. At the time of this change, the total was $1.1 quadrillion for OTC derivative types.

This is the same trick that the private banks and firms have used for the last 15 years to hide massive losses and claim false profits to trigger executive bonuses (it used to be illegal, until the laws were changed under the Clinton, Bush, and Obama administrations).


If even 25% of these contracts go bad, you are talking about $250 or so trillion needed to be covered. ( this is if the total is $1 quadrillion) The global GDP is only 55 to 60 trillion a year. The definition of economic depression is a 5% drop in GDP over 2 consecutive years.