Dear CIGAs,
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The quoted amount of OTC derivatives on Lehman's books are not notional value, but some silly mark to no market. The real number is trillions. When either party to an OTC derivative fails the value of that derivative instantaneously become the size of what was previously called notional value. With one quadrillion, one thousand one hundred and forty four trillion (BIS) in notional value, there is NO means to stop this financial cataclysm.
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The shit has hit the fan because trillions of dollars of OTC derivatives failed Monday.
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The entity to fail is not the winner on those fraudulent pieces of paper but the loser. Otherwise it would not have failed.
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Many other counter parties to those derivatives have fallen into potential bankruptcy.
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The long spoken about "domino effect" is active and I now believe the Fed did not consider how a derivative becomes full value (formerly called notional value) when one side goes into bankruptcy. Yes, Pandora's Box opened Monday morning.
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For years I was laughed out when this present condition was clearly described.
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Gold is going to $1200 and $1650. Laugh at me again if you must.
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Those that demand a date already have one - on or before January 14th, 2011.
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This is it and it is now.
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The greatest damage done to gold shares and gold came directly from those that were over-margined. Yes shorts got it down but those on margin got them here. Shame on you who demanded margin!
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Continue to ignore all the means of protecting yourself and you do not deserve to be protected.
- If you fail to retain proper parties such as an attorney to read your custodian agreement you do not deserve to be protected. Cheap out NOW and you crap out later, and that won’t be much later…
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