Sunday, November 27, 2011

$708 trillion of derivatives

There are now $708 trillion of derivatives outstanding according to the BIS.  The biggest category of these is Interest Rates Swaps at $442 trillion.

I don't know what this means. Probably nothing, unless something unusual happens, like a sudden rise in interest rates.  And then if a big counterparty fails, a la Bear Stearns or AIG, all hell will break loose.

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