End Of The World, I Guess

Just when everybody in real estate thought it can't get any worse, it did in spades. The derivatives market is in chaos. We use that term because you can't see the collapse of world financial markets yet. Derivatives are financial instruments that are unregulated and basically are used like when a casualty insurance company wants to spread the risk. Well derivatives go all the way to spreading the risk of a tonga fishmonger or whatever. There is more money in derivatives than there is money in the world. 700 : 1 leverage makes this impossiblity possible. The amount has been estimated to be 300 trillion dollars. The derivatives market is much like when a bank holiday was declared during the depression or should I say the last depression. Trading is pretty much frozen which is not much of change since these instrument never really traded much in the first place. These instruments would be called illiquid. Only now has the collapse of the subprime market forced the issue as to the value of these instruments. Hedge funds were major players in derivatives and they have been forced to halt redemptions. THE HANDWRITING ON THE WALL ...yeah sure show me some proof of what you have just said. Okay, the largest derivatives house is JP Morgan Chase symbol JPM. The Break glass and pull the alarm occured in April 2007 when JPM stock traded at 4 X time average daily volume then the stock preceded to make a new high of $53.25 a share. It is now on a downward path...Obviously the Federal Reserve would protect JPM, but that can't happen when they face a $300 trillion dollar sunami. What would happen to paper money if the Fed printed a $300 trillion bill. Bank presidents are now dropping like flys, but we have given you the most protected as our example.