HowardTumbling Dice- Rolling Stones
November 23rd 2007 14:03
Rolling Stones- Tumbling Dice
First I need insurance, dont know what will happen;
Financial system on the brink;
Baby, I go crazy;
With those derivatives I think;
Doubling derivatives boggle my mind;
Let me be your partner in crime;
Honey, got no money;
But still, please rooooooll me,
and call me the tumbling dice;;
Lyndon LaRouche warned that one financial market will continue to increase, but that is NOT a good thing. In fact, the size of the global market for credit derivatives doubled during the twelve months ended June, 2007, according to a report issued today by the Bank for International Settlements. Credit derivatives, which are essentially insurance policies which purport to protect speculators against defaults on securities, rose from $20 trillion in June, 2006, to $43 trillion in June 2007. $23 trillion of these derivatives are deals between the major derivatives banks themselves, while another $18 trillion are between these banks and other financial institutions, the BIS reported.
Since all of the major derivatives banks are already bankrupt, the idea that they can insure each other against defaults is ludicrous. The BIS also reported on the size of the global derivatives market, which, it said, has increased by 35 percent in the 12 months ended in June, 2007, jumping from $454 trillion to $613 trillion. The over-the-counter (OTC) market accounted for $516 trillion of the total, while derivatives traded on exchanges accounted for $97 trillion. These numbers should be taken with large blocks of salt, since the sum total of all derivatives bets is undoubtedly measured in quadrillions. And when it finally goes, that will be the real crash to end all real crashes.
Of course that is not much consolation if your real estate and house are going into default as your ARM Mortgage balloons upward in monthly payment.
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