Reinko

CDS Industry: Zero Sum Game or Ponzi Scheme?

The CDS is only a small fraction of total over the counter derivates that total to about 600 trillion of notional amount.

These contracts did cost about 14.5 trillion or roughly one US GDP.

In terms of leverage it is about 1:40.

As usual the problem with stuff like this: Only a small rimple of a few percent in the 600 trillion fantasy world triggers and entire GDP size chunk of money to be paid.

Hardly a 'protective umbrella' after my humble opinion.