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  • Assets and Capital: The Two Major Issues in this Crisis [View article]
    I think it was a 2003 fortune article where Bffet warned us against the derivitives market. His weapons of mass finacial destruction phrase was apt. He inherited a mess of derivatives from General RE.

    Estimates of the derivative obligations are many, but I've seen $63trillion quoted widely, though I doubt anyone really knows.

    With all due respect to Mr. Mason, I believe the article above is too simplistic because it fails to take into account the massive cascading effects from derivatives market.

    Just as a nuclear explosion doesn't just incinerate its target, but spreads fallout globally for years, so to the approach that would allow the market to work its magic.

    In this case its magic, due to unregulated derivitives, is more like nuclear fallout that would effect solvent and healthy banks around the globe for years. In summary, capital around the globe will be destroyed, and impaired to a far greater and larger degree with a let the market fail approach.
    Sep 29 20:37 pm |Rating: 0 0
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