The dog’s been publicly pondering the future of our monetary system for a few weeks now and mentioned the so called credit crunch WMDs along with the US bailout and why it won’t make a blind bit of difference to anything with regards to the potential for the demise of capitalism.
Even as the UK media is reporting that the markets are surging on news the latest European Bailout packages this is a tiny, minuscule drop in the ocean compared to the utter ridiculousness that has gotten us where we are with this.
Credit where credit is due, (no pun intended) the Market Oracle (of course) brought this post to my attention.
The Crushing Potential of Financial Derivatives Go and read it now. seriously.
The image and quote below is from there, and shows the total amount of money these morons have gambled, compared against their original stake money (all the money in the world)
America has of course been kicking ass again, this time with the world’s majority share of this.
As you can see on the table at the “Big Picture Blog” (many thanks to them for their post), U.S. bankers should have their very own “reality TV” show entitled BANKERS GONE WILD! for how they’re rolling the dice with our money and our financial system.
All the banks on this list (remember, things have deteriorated since Spring 2008) have exposure amounting to many, many times their total capital. As capital is eroded due to ongoing “realized” losses and further impairment of capital assets, the situation only gets worse. T
These banks must be propped up or merged together to avoid a meltdown, as we’ve already seen happening. Their exposure alone is apparently enough to consume all of the world’s capital as calculated above.
The problem this time may not be “too big to fail” but, more accurately, “too big to save”. Only time will tell.
But, seriously, do you REALLY THINK that Paulson’s $700 billion (yeah, it’s really larger than that…) bailout plan will do anything considering the size of the problem?
From the Big Picture
WTF? $90 Trillion dollars derivative exposure for JPMorgan ? No wonder the Fed “rescue” of Bear Stearns was via JPM — it was their own derivative exposure that was at risk.
I’ll say it again.. WTF!!!!