That's what some of the Masters of the Universe seem to be doing and no one seems to be watching over them. To put the number below into some perspective, in 2006 the entire world had an income of $48.8 trillion (Atlas method) or $66.8 trillion (PPP method). A brief explanation of the 2 methods can be found here. Also note that SIVs and CDOs can often be hidden "off balance sheet."
A mind-blowing machine
In America, land of the bubbles, the next pop will be the biggest
By Paul B. Farrell, MarketWatch
Last update: 1:12 p.m. EST Jan. 29, 2008
Pimco's Bill Gross warns that $500 trillion of derivatives are hiding in a "shadow banking system" that "craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage ... with no requirements to hold reserves against a significant 'black swan' run that might break them."
Derivatives have become a renegade army of "I, Robots." "According to the Bank for International Settlements ... total derivatives amount to over $500 trillion, many of them finding their way onto the balance sheets of SIVs, CDOs and other conduits of their ilk comprising the Frankensteinian levered body of shadow banks."
Wednesday, January 30, 2008
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