Wednesday, April 6, 2016

Derivatives of major Banks 2008 and now

It has been said, that unless we learn from history, we are doomed to repeart it.  In the financial industry collapse of 2008, many major banks were almost brought down by having such a large exposure to Derviatives.   The reason they were not brought down, is because the federal government stepped in and bailed them out.
So?  What did they do after getting rescued?
They have gone on and done it again.  Only this time, much larger.   Look at the chart below and see (in millions) how much greater their risk is in derivatives, than their equity.
When the music finally stops there are going to be trillions lost this time.  Not billions.
Sheesh!



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