Are banks hiding profits off balance sheet?

$16 trillion

$680 trillion

What happened to the other $644 trillion? I listened to the shadow bank man for 2 minutes. That's all I could take.
 
At the time, the derivatives market was relatively small. But it soon exploded, and the face value of all derivatives contracts across the world — a measure that counts the value of a derivative’s underlying assets — outstanding at the end of last year totaled more than $680 trillion, according to the Bank for International Settlements in Switzerland. The market for credit-default swaps — a form of insurance that protects debtholders against default — stood around $38 trillion, according to the international swaps group. That represents the total amount of insurance that has been written on various kinds of debt, but the amount that would have to be paid out if the debt went into default is considerably less.

Note that the ASSETS might be worth that staggering sum, but the credit default swaps involving those assets are significantly lower?

These sums are so staggergly huge that the eyes glaze over and most of us dismiss them as impossible.

The US GDP is only about $14 trillion, isn't it?

So I presume that the $680 Trillion number must pretty much be (if not entirely vapor) the combined amount of all debt (long and short) that exists in the world.

Now I am NOT a derivativestrader, know next to nothing about the business, either.

But the sheer size of this claim puts the onus on the claimant to make sense of it for us.

Telling us to READ MY BOOK, isn't likely to give your claim much credibility.

Would you be so kind as to give us a thumbnail description of how such a huge amount of debt becomes a hidden asset the banks are keeping off the books?

Because otherwise, really, how can any of us comment on information that ONLY YOU seem to have?
 
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There's a difference between notional and net exposure. Today's notional exposure is about $640 trillion. Net exposure, depending on you ask, is $2-$10 trillion. Notional is if you add everything up. Net is when you offset each position. Almost all derivatives are offset, i.e. the value goes up for one investor and down for another. In theory, the real exposure is the net exposure. But that assumes no counterparty risk, a fanciful assumption. The other side of the counterparty if there is a failure is the government because they will bail out the market.

Also, most of the derivatives market is interest rate and currency swaps, which last I heard, accounted for three-quarters of the entire market. These are plain vanilla swaps, and, for the most part, are about as scary as the squirrel in the tree. However, that leaves ~$160 trillion notional in other derivatives, which is still a big number, considering that the GDP of the planet is ~$150 trillion.
 
Notional is a $100,000 Treasury bond contract.

The price just dropped from 134 to 126. That's an $8000 loss. If its a hedge (short) against a $100,000 bond its a wash. There are 450,000 trades per day. On the 10 yr note there are 1,000,000 contracts traded each day. When banks buy Treasury futures they are speculating with the depositors money. Is that different than going to a casino?

I want the wizards to explain why the market skyrocketed in August. Have you heard about the law of supply and demand? Was it repealed?
 
I have no idea and neither does anyone else because its all secret and off the balance sheet.

The fact that none of the banks deny it makes me assume that the $680 trillion is close to reality. I suspect that when any derivative contract is created that the buyer and seller both know the actual amount, don't you?

Are we a nation of imbeciles? Shouldn't the Congress and President be told to investigate? There shouldn't be $1 off the balance sheet. There is no legitimate reason to allow any bank funds to be off their balance sheets.

Did you miss the mortgage meltdown? Did you miss the TARP bail out?

I wrote my book to expose reality. If you want to learn buy JUST CAUSE JUST FACTS.
 
I worked hard for 5 years writing my book. My purpose was to enlighten our entire country.

I had an experience none of you ever had. I spent 9 years in Federal prison. It took me 20 months to be allowed a trial because the case was set up by me to expose the government and media. They didn't want to be exposed.

No literary agent would represent me and I was forced to self publish the book. It costs me $4.74 per copy. I'm not going to give it away. You can buy it on Amazon. I'm not Mark Twain but I can write OK. I included verbatim transcribed dialogue for 2 reasons. I wanted 100% accuracy and the dialogue was better than any fiction writer could write.

I also wanted the reader to be entertained. It isn't a dry story about derivatives. Its about money and spectacular corruption. I added mob and prison experiences for entertainment. There's a big market for mob stories. One event was about the kidnapping of Judge Nevas.
 
Every single fact cited by TORO is a mistake.

If you want to see the real amounts go to the CME website.

Toro claims there are $640 trillion notional value and the risk of loss is $2 to $10 trillion. That would only be 1.56% if you use $10 trillion. In fact the US Bond contract alone just dropped fro 135 to 124. On a $100,000 bond contract that's an $11,000 loss or 11%.

Toro bought the Wall Street bullshit and is now peddling that compared to the actual facts. No one has any clue what could possibly be in the $640 trillion off balance sheet deriviatives. That's a secret they won't reveal. But no one is denying it. No one being the banks' executives or the accounting firms who audit. The accounting firms are not about to give up their fees to protect the UNITED STATES of ASSHOLES.

This forum is populated by ignorant, gullible, brainwashed fools. Then there are the other 17,000 people who never reply. Why are they wasting their time here?
 
Every single fact cited by TORO is a mistake.

If you want to see the real amounts go to the CME website.

Toro claims there are $640 trillion notional value and the risk of loss is $2 to $10 trillion. That would only be 1.56% if you use $10 trillion. In fact the US Bond contract alone just dropped fro 135 to 124. On a $100,000 bond contract that's an $11,000 loss or 11%.

Toro bought the Wall Street bullshit and is now peddling that compared to the actual facts. No one has any clue what could possibly be in the $640 trillion off balance sheet deriviatives. That's a secret they won't reveal. But no one is denying it. No one being the banks' executives or the accounting firms who audit. The accounting firms are not about to give up their fees to protect the UNITED STATES of ASSHOLES.

This forum is populated by ignorant, gullible, brainwashed fools. Then there are the other 17,000 people who never reply. Why are they wasting their time here?

Dude

You might want to try a new marketing campaign. Insulting people isn't a good way to sell them.
 
America is sinking fast.

That is why I am going to twist this thread by trying to promote my book which could be yours for just 7 easy payments of $99.99. The phones are ringing and a friendly salesman will take your call.

I am Stephan A. Miller and I approve this message.
 
These derivatives are on the books of the "Bank for International Settlements." Today they total $632.6 Trillion. You can see the totals here under the counter labeled "Currency & Credit Derivatives"

Something is really screwed up. On 11-20-2010 at 05:20 AM I posted the above quote with the link to the debt clock that showed the "Bank for International Settlements" showed $632.6 Trillion in "Currency & Credit Derivatives". Today it only shows $577.4 Trillion. What happened to the $55.2 Trillion of Currency & Credit Derivatives that disappeared? Did these expire, go bad or did the reserve banks monetize them?

A couple of years ago this "Currency & Credit Derivatives" number was around $750 Trillion.
 
These derivatives are on the books of the "Bank for International Settlements." Today they total $632.6 Trillion. You can see the totals here under the counter labeled "Currency & Credit Derivatives"

Something is really screwed up. On 11-20-2010 at 05:20 AM I posted the above quote with the link to the debt clock that showed the "Bank for International Settlements" showed $632.6 Trillion in "Currency & Credit Derivatives". Today it only shows $577.4 Trillion. What happened to the $55.2 Trillion of Currency & Credit Derivatives that disappeared? Did these expire, go bad or did the reserve banks monetize them?

A couple of years ago this "Currency & Credit Derivatives" number was around $750 Trillion.
200+T in defaults triggered CDS closure?
 
These derivatives are on the books of the "Bank for International Settlements." Today they total $632.6 Trillion. You can see the totals here under the counter labeled "Currency & Credit Derivatives"

Something is really screwed up. On 11-20-2010 at 05:20 AM I posted the above quote with the link to the debt clock that showed the "Bank for International Settlements" showed $632.6 Trillion in "Currency & Credit Derivatives". Today it only shows $577.4 Trillion. What happened to the $55.2 Trillion of Currency & Credit Derivatives that disappeared? Did these expire, go bad or did the reserve banks monetize them?

A couple of years ago this "Currency & Credit Derivatives" number was around $750 Trillion.
200+T in defaults triggered CDS closure?

Who was on the loosing side of those defaults?
 
The CDS issuers were unless they can demonstrate fraudulent covenants. One of the scary aspects of the putback lawsuits is that Treasury, HUD and the Fed plus the various agencies can spawn a chain of multiple derivatives that are in effect counted twice such that 10 T in actual problem loans can in fact generate 100 T in derivatives where only 3-4 T actually changes hands. Loans originated by say Countrywide, securitized by Merril Lynch, guaranteed by Fanny or Freddi, sold to to Societe General and then sold in smaller lots to European bond funds should generate 12-20 derivative dollars per dollar at risk. Currency Swaps, CDSs on currency, loans and guarantees plus agency and service fees across the food chain create a huge derivative multiplier. In the case of your example total derivatives exceed global traded debt by at least 10 times add in the usual 10-20% haircut plus residual value (net foreclosure receipts and good loans within the tranche) - collection and legal costs total losses apportioned out should equal 1-5% of total derivative resolution.

Another factor is the ECB rules on new derivative issuance. That I do not understand nor will I comment on it.
 
Currency derivatives tend to be very short term. For obvious reasons. Esp in tumultuous times. And Credit derivatives include CDS. I doubt many players are as eager to buy shares of one another's default potentials as they were in years past. This is probably a good thing.
 
I doubt many players are as eager to buy shares of one another's default potentials as they were in years past. This is probably a good thing.

No probably to my view. I'm not going anywhere near such practices. They were only as good as the false evaluations.

There's still a lot of venues to generate income though, however I have changed my investment portfolio almost completely.
 
I'm a capitalist and worked 5 years to write the book. We Americans like capitalism. I wrote the book to expose corruption no one on this forum ever heard about because it was covered up. More than $90,000,000,000 which back in 1987 to 1996 was a ton of money.

Its a fantastic Xmas present and then you and all your friends can grasp the class war we can easily win if we can all pop out of the brainwashed trance the under class is in.

Its absolutely critical to just consider you might be brainwashed. Then you will be able to grasp that the privileged class are about a few million crooks who steal Americans jobs and exploit slaves in China to transfer our wealth to them by out right theft and bribery.

The longer you people fail to address the brainwashing trance, the longer we'll have more poverty. We must elect a legit government to prosecute the privileged crooks in banking, and other industries.

Click here to buy the book
Screwed Again
 

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