Credit Default Swap scandals about to be revealed ?
“HARRY Markopolos, the whistleblower on Bernie Madoff who proved to be much smarter than the SEC, says there are evildoers out there who will make the Ponzi scum "look like small-time." Markopolos gave a speech to 400 of the faithful at the Greek Orthodox Church in Southampton and predicted major scandals will soon be revealed about the unregulated, $600 trillion, credit-default swap market. "To put it in simple terms, it is like buying fire insurance policies from five different insurance companies on your neighbor’s house and then burning down the house," he said”
Are these numbers be real ?
BIS earlier claimed that the derivatives trade increased from USD 1,144 Quadrillion in 2007 to 1,405 Quadrillion in 2009, whereas “only” USD 57 Trillion of that are CDS. On the other hand, maybe it doesn’t matter considering that the relative scale of the world’s financial engine is as follows:
1. The entire GDP of the US is about USD 14 trillion and falling.
2. The entire US money supply is about USD 14 trillion with rising Quantitative Easing in trillions.
3. The GDP of the entire world is USD 45 trillion and falling. USD 1,405 trillion is 31 times world GDP.
4. The real estate of the entire world is valued at about USD 65 trillion.
5. The world stock and bond markets are valued at about USD 70 trillion.
6. The trans-national universal model financial institutions own about USD 150 trillion in derivatives.
7. The population of the whole planet is 6.8 billion people. So the derivatives market represents about USD 206,000 per person on the planet.
When will Obama and Bernanke save us by purchasing all these assets ? They can be placed on the Fed’s balance sheet, right next to all the other assets they purchsed from BOA, JPM, GS, etc..
Thanks for reminding us about the $600 trillion derivatives market. People should be aware that we have already paid derivative losses and the policy appears to be that we will continue, even though the losses will destroy what’s left of our economy.
Last October, we were told that the bail-out number was estimated at $700 billion. Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program recently reported that the U.S. Rescue May Reach $23.7 Trillion. “TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform (reported by Mish).
That’s around $80,000 for every person in America and don’t forget, we are paying interest on all that money that we borrowed from the banks to give to the banks. The derivatives will take the $80,000 and quickly make it $8 million/person. Even if we were willing to sell everything we own and live on the streets to save the banks, that won’t be enough.
J.P. Morgan Chase, Goldman Sachs, Bank of America, Citibank and HSBC (top 5 banks) are responsible for over 90% of the entire derivatives market. They are almost entirely responsible for this mess yet they are the beneficiaries of the bail-out. It is no coincidence that these banks also own around 90% of our government. This is treason as the government is allowing the nation to be destroyed in order to save five big banks.
To those who say the banks are too big to fail, I would say that our nation and the people are too big to fail. We have become serfs in underwriting all bank risk and fraud while enjoying none of the rewards.