Nationalize the failed banks...NOW !

[EVDebs]

The Village Voice article What Cooked The World's Economy ? It wasn't your overdue mortgage
http://www.villagevoice.com/2009-01-28/news/what-cooked... /

shows us the world's derivative debt is around $600 trillion. The OCC's Quarterly Report, mentioned in Stephen Pizzo's article Failed Banks Want More Porridge
http://www.smirkingchimp.com/thread/20032

OCC US Treasury page 22 Table 1 mentioned in the article
http://www.occ.treas.gov/ftp/release/2008-152a.pdf

shows us that US banks are on the hook for around $176 trillion of that $600 trillion.

In order to get out from under this speculative debt bomb the bankrupt banks must first be nationalized. Until Obama's people get this through their skulls, the economy will continue to sink and we'll be on the bailout merry-go-round 'till the bitter end.

[ozone_man]

1. Enough with these Zombie banks already.

A few trillion here, a few trillion there, pretty soon we're talking about real money.

[dkofos]

2. Looks like this will have to happen worlwide.

[FarCenter]

3. I think that this is a bit misleading

"shows us that US banks are on the hook for around $176 trillion of that $600 trillion."

The OCC supervises commercial banks. At the time that the OCC report was prepared, that would not have included Merrill Lynch, Goldman Sachs, Morgan Stanley, and probably not Lehman Brothers. Since these have been converted from investment banks to commercial banks, the 176 would be a lot bigger. That said, note that the numbers are notional, and not value at risk. Not even in a collapse would the actual damages approach those values, due to netting of offsetting contracts.

We also know from the Lehman collapse that other non-bank US corporations were big in derivatives trading, e.g. AIG.

[Nick at Noon]

4. I can't believe that figure of $600 Trillion

The GDP of the entire world is $54 trillion.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

Click on

List of countries by GDP (nominal), a list using the current exchange rates for national currencies