$707,568,901,000,000: How (And Why) Banks Increased Total Outstanding Derivatives By A Record $107 Trillion In 6 Months

Tyler Durden's picture

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dark pools of soros's picture

and all of it backed by one ounce of gold

Atlas_shrugging's picture

Normalcy bias?  What's normalcy bias?

Turd Ferguson's picture

This is incredible! $107T in just the past six months?
It's obvious that they don't even care anymore!
Everyone knows that the whole system will completely fucking explode before any new CDS would have to be paid off so why care? Sell those fuckers like there's no tomorrow because, frankly, there isn't going to be a tomorrow. Get your bonus and party like it's 1999.

flacon's picture

Is $707T greater than the value of all the earth and every thing in it combined? What happens when we hit that point - if we haven't already? We really will need some sort of extra-terresterial cosmic something to add more value to all those imaginary binary digit "money".

Temporalist's picture

In Zimbabwe $707T wouldn't buy you a mousetrap to catch dinner.

JustObserving's picture

We are all Zimbabweans now. Ich bin ein Zimbabwean, if you prefer.  We need a Mugabe ..... never mind.

nope-1004's picture

Like I said before:  When I was a kid, $1 trillion was alot of money.

Today?  Meh .. ~~~

So how do u want your default?  Fast?  Or slow?



strannick's picture

$Is 707T greater than the value of all the earth and every thing in it combined?

Not if paid in USD


markmotive's picture

And the finance bubble keeps expanding. 2008 didn't end it.

According to Steve Keen, the only answer to the inevitible great depression is to write down all debt:


GMadScientist's picture

Only if it actually gets paid!

The core lesson of Greece is defaults are whatever TPTB say (pure Calvin Ball).


$107T? ...just the bellwether of moral hazard.

Manthong's picture

I thought margin calls were voluntary.

Kayman's picture

Zero Reserves, collect the premiums, and stiff-arm the insured. Who wrote this script ?

Oh, and if something goes wrong, get the Gubmint to bail us out, like in 2008.

Oh, gee, Gubmints broke too.....

What's plan C ?

MeelionDollerBogus's picture

oh, I got this one

So how do u want your default?  Fast?  Or slow?

at a medium pace!

trav7777's picture

Cmon Tyler, that's the credit growth the system needs, right there in synthetic debt spun from nowhere.

the consumer sector sure isn't levering, so they have to pile fantasy debts atop everything to keep the numbers churning.

People lost sight of the fact that since the 2000 bubble burst, the only way to grow the debt pile, which had increasingly become off-books and in phantom shit was this way.  The 80s started this and the GLB financial bill along with accounting reform act were necessary to ensure the continued growth of this paper system

Coke and Hookers's picture

This is a part of the reason for the unholy alliance between bankers and politicians. Real economies (you know, the part of the economy that creates wealth) stop growing or contract. That's not good because hardship pisses people off and politicians get voted out. The solution is either to reverse globalism & outsourcing (not fucking way!) or falsify all the economies. Bankers come to the rescue and create a huge debt bubble to fake economic growth and prosperity. As a reward for their trouble their huge derivatives engine acts as a gigantic real-wealth transfer mechanism sucking people's posessions into the banks. Politicians are now dependent upon banks and take orders from them. Bankers now control the USA and the EU throught this deal. If bankers need to find new territitories for new bubbles or neutralize pesky goldmongers like Gaddafi they tell their politicians/bitches to mobilize NATO. Politicians create united front against the people to defend their bank handlers and we turn into slaves with the glorious purpose in life to work to service the debt bubble created by the banks and be sacrificed like cattle if the bankers need to liberate some middle-eastern country.

macholatte's picture

The solution is either to reverse globalism & outsourcing (not fucking way!) or falsify all the economies.

You may have hit the nail, old man. The economies are being falsified, we know that, and will likely end up with "every man/country for himself" will mean the end to the globalism crap. The so called emerging markets will sink back to where they were circa 1950, Europe will have to dig itself out of the Euro Zone because none of them will want to do it again, the USA will have to go into isolation and hunker down and re-learn what manufacturing real stuff is all about, the ME will have its one last huge war, Russia & China will gasp for air and will want to stay out of any conflicts.


 It is pretty obvious that the debasement of the human mind caused by a constant flow of fraudulent advertising is no trivial thing. There is more than one way to conquer a country.
Raymond Chandler

Lord Koos's picture

It'll be hard for the US to get manufacturing to scale that was in say, 1970... no cheap oil this time around.  

Reformed Sheep's picture

The labor costs are probably comparable, tho...

GMadScientist's picture

a) Try 1850.

b) Russia takes a chunk out of Europe.

c) China buys the rest for a song.


Silver Kiwi's picture

New Zealand has just reelected John Key as our Prime Minister with a mandate to sell all the countries state owned assets to raise NZD$4b to pay down part of our debt. Jonkey is old school bankster through & through. From his own website  http://www.johnkey.co.nz/pages/bio.html   

"John launched his investment banking career in New Zealand in the mid 80s. After 10 years in the New Zealand market he headed offshore, working in Singapore, London and Sydney for US investment banking giant Merrill Lynch. During that time he was in charge of a number of business units including global foreign exchange and European bond and derivative trading. In 1999 John was invited to join the Foreign Exchange Committee of the Federal Reserve Bank of NY and on two occasions undertook management studies at Harvard University in Boston.  "

I thought us kiwi's were 'safe' down here out of the way. Unfortunately we're about to be fucked just like the rest of the planet...



gangland's picture

end neoliberalism before hard fascism becomes inveitable and deeply entrenched. all of this is neoliberalism.





Sean7k's picture

Too late. Fascism was becoming entrenched in 1942. Now, we are used to it.

MolotovCockhead's picture

Kiwi are flightless birds. You let loose a snake among your midst? Worst you make him the head kahuna!! Sorry for those gullible kiwis, they are destine for extinction

Tompooz's picture

@silver kiwi. You might also have mentioned that a certain David Farrar, a figure behind the scenes of Key's National party, takes credit for having mentored John Key and introduced him to his subsequent political career.

Frankly, I don't know if it isn't better to elect a bankster openly, than to see one take power through a coup d'etat or a forced resignation..

Or.. have the banksters install a teleprompter puppet.

Pegasus Muse's picture

It is time to go Mauri Warrior on his John Key's ass.  Same same for other banskter scum:


There was a time, not so long ago, when the New Zealand's First Inhabitants considered honkey white meat a delicacy.

Fozzy Slippers's picture

NZ is the Brit Empire. Owned by the crown. Key is part of the illminati Joo banker system. Fact he is a Joo. He does what the Queen tells him to do. Just like that ass eater Harper.

No Brainer

DavidAKZ's picture

Banking occupation. Here in Oz Labour government trying to erradicate (low) public sector debt by 2013. THe irony is, they have 10 years of conservative party rule to thank for that !

Tao 4 the Show's picture

"that's the credit growth the system needs"

At more than 20% per annum (based on the past 6 months of data), it would seem like a bit more than what is "needed" from the perspective of various growth rates around the world.

Let's see, 20% puts planet earth somewhere between Italy and Greece on the defaulting curve.

CPL's picture

Ta da!!!  For my next magic trick of math....

- Any of TPTB


Good thing nobody has noticed what England is doing yet.  Might mean they end up put into the Junk box with Hungary.

BurningFuld's picture

So, you always like to get down to the bottom of this shit. Like who are the people truly getting screwed by this. Well it is anyone that is trading their hard work or natural resources for all the funny money being created by this giant ponzi. That is the insane amount of money being "loaned" into existence by this scheme. So the people really in the end who are getting screwed are the people in the third world countries that have worked their ass off for over a decade now that will end up with zero for all their effort and the countries trading their oil and minerals will end up with zero. Never kid yourselves boys and girls the big big benefactor here is the good old USA!

Gold standard anyone?  Be careful what you wish for.

RiverRoad's picture

Re "trav7777" 11/26/11 @ 22:43:   You are quite correct that this derivitives mess started in the '80's:  I distinctly recall reading at least one article in the MSM, after the precipitous plunge in the markets in the Crash of "87, that "derivitives" had played a large role there, however little was offered in regard to an explanation of the concept at the time.  Shortly after that crash I came across the word again in several Vanguard funds prospectuses referring to the fact that they would not be using derivitives in the operation of the funds; no definition of the term was provided. Then the word itself virtually disappeared from print for the next couple of decades..... 

Caviar Emptor's picture

No but in Zimbabwe $707T could buy you one very skinny hooker

trav7777's picture

stop trying to impose your culture on them, you rayciss

OldPhart's picture

"Some of those victims are too young to walk, much less protect themselves."

Tough to find a virgin in Zimbobwe

CPL's picture

Both boys and girls, not just girls, the folklore extends to both sexes.  All that counts is a virgin is used.

Kayman's picture


Honest politician myth...the more you screw the middle class, the more likely criminal bankers will return your tiny little soul...

sessinpo's picture

That $707T is based upon the fake currency reserve of the us dollar and not tye  Zimbabwe dollar . It is Zimbabwe dollars that won't buy you a mousetrap to catch dinner.. The overall lesson is that all fiat currency backed by nothing are doomed.

In Fed We Trust's picture

Now the only thing you need to know about derevatives is that they have legal precedent over stock and bond holders.

I littlte not so mentioned fact. So that said, which domino's are still on tge table? Tyler?

And the pot goes too...........JPMorgan!!!

ozziindaus's picture

In the end, it doesn't matter to them how much they nominally have but rather how much more than you they have. It's all about percentages. 

midtowng's picture

Good point. How do you hedge $707 Trillion when everything in the world doesnt' equal that? It's mathematically impossible.

SOMETHING has to be unhedged.

margaris's picture

We are surface dwellers, and we do surface business.

If you could count all gold, silver, iron, copper, diamonds etc that is INSIDE the earth at great depth (>50 miles and deeper)....

you might get a number that is far higher than just XXX trillions. Might not even be expressed in septillions.

Its just freaking impossible to mine the shit that is down there.

CPL's picture

Don't know why you got junked for stating a fact.


We can dig a hole that deep, it's just the people going down them don't come back out of them.  Between the pressure and heat, a human cooks to medium-well in under 15 minutes.