If you own an Investment Bank or Bank, I would avoid these
Warren Buffett predicted of financial derivatives: they are proving to be “weapons of mass financial destruction".
Taken from Mike "Mish" Shedlock at: http://globaleconomicanalysis.blogspot.com
Look at the level of derevatives in these banks.
JPM $91 TRILLION in derevatives
C $34 TRILLION in in derevatives
BAC $31 TRILLION in derevatives
W $5 TRILLION in derevatives To big to fail? We will see... to big to rescue makes more sense to me.
Let's Not Pretend
I am not going to pretend that I know how much of that is real vs. imaginary risk. But as long as we are not pretending, let's not pretend about this:
*Whatever the risk is, it is enormous.
*That risk is 100% guaranteed to not be marked to market.There is no freaking way, no matter how many people are thrown at the task, to figure out the above mess with any degree of certainty by anytime next week, let alone Monday.
*Fannie Mae's hedge book could not be figured for over two years. Can Bear Stearns' hedge book be figured out in two days?