Can't help it kind of feeling you may say, last few blogging have seen myself dwelling in the issues of derivatives. How we can whether through this financial turmoil will depends on the process of unwinding those derivatives that put a strangle hold on the financial system worldwide.
Bankrupted Lehman Brothers still had 400 billion of credit default swap (CDS), how and when this derivatives CDS going to unwind it's anybody guess. Like Buffet said he prefer holding cats by it's tail then rather trying to unwind a derivatives business. Who is holding the bags eventually it still anybody guess work, counter parties risk still a worrisome things.
Total derivatives worldwide it's £516 trillion! A massive financial thermonuclear time bombs.
Stock market it's up steeply from Australia to Europe today, do it signify that the current financial turmoil it's done and over. At the Chinese saying said "good things is at the back stage", a lots of issues from counter parties risk to the issues of bank solvency still had not been solved by Central banker. By pumping liquidity to the banking systems only solved one parts of the many problems arises from this credit crunch. The true pictures will come into play when unwinding the massive derivatives time bomb!
Read the following article : A £516 trillion derivatives 'time-bomb'
By Margareta Pagano and Simon Evans.
Buy gold no counter parties risk!
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