Today, the Greek people are going hungry to protect a rigged $32 trillion Wall Street casino.
The Midas Touch Gone Bad
In an article in The Observer (UK) on February 11th titled “The Mathematical Equation That Caused the Banks to Crash,” Ian Stewart wrote of the Black-Scholes equation that opened up the world of derivatives:
The financial sector called it the Midas Formula and saw it as a recipe for making everything turn to gold. But the markets forgot how the story of King Midas ended.
As Aristotle told this ancient Greek tale, Midas died of hunger as a result of his vain prayer for the golden touch. Today, the Greek people are going hungry to protect a rigged $32 trillion Wall Street casino. Avizius writes:
The money made by selling these derivatives is directly responsible for the huge profits and bonuses we now see on Wall Street. The money masters have reaped obscene profits from this scheme, but now they live in fear that it will all unravel and the gravy train will end. What these banks have done is to leverage the system to such an extreme, that the entire house of cards is threatened by a small country of only 11 million people. Greece could bring the entire world economy down. If a default was declared, the resulting payouts would start a chain reaction that would cause widespread worldwide bank failures, making the Lehman collapse look small by comparison.http://www.commondreams.org/view/2012/02/20
= new reply since forum marked as read
To put that number into some kind of perspective, Summers says that the derivatives market is:
40 times the world’s total stock market
10 times the value of every stock and every bond on the planet
23 times the world’s gross domestic product
At present Bank of America holds derivatives worth approximately $75 trillion, while JPMorgan Chase (already a bank covered by the FDIC) holds another $79 trillion. By Gary North’s estimate, the banks considered too big to fail hold at least $250 trillion in derivatives."
So when a bank goes down it may open up the derivative losses to be covered by the USA taxpayer and the FDIC.
The problem is there is no possible way a bank, the taxpayer or the financial system itself can cover those losses.
It will end the monetary system as we know it -
