Re: Fears of Lehman's CDS derivatives haunt markets

[David Farber <dave () farber net>]

Begin forwarded message:

> From: "Norman MacLeod" <gaelwolf () waypt com>
> Date: October 17, 2008 1:11:06 PM EDT
> To: <dave () farber net>
> Subject: RE: [IP] Fears of Lehman's CDS derivatives haunt markets
>
> There are a couple of really severe problems with CDSs.  First, the  
> opacity
> of that program makes it very difficult to find them . . . so we  
> don't have
> a good handle on who is exposed, and how deeply those exposures run.
> Second, the pile of CDSs is somewhere around or above $55  
> Trillion . . .
> which, unless I'm mistaken, is somewhat greater than the entire  
> global GDP.
>
> That would tend to indicate that the slippery slope is about to  
> become a
> heck of a lot steeper than it is today.
>
> I'd say that those who live in rural areas are much better position  
> for what
> may come than those who live in urban and suburban areas, regardless  
> of how
> much the country mice have stashed away.
>
>         Norman




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