On 2 April 2009, in the FT Ms Gillian Tett has eventually started asking a question, implying that the answer was not known: “how big the toxic rot really is, let alone when it might end”? A bit late my dear. I asked this question back in October last year giving an estimated answer $1 - 2 quadrillion (qn) dollars at the time. By now it is likely to be of the order of $5 - 6 qn. It is quite depressing that it takes an FT's journalist over 6 months to ask the most fundamental and trivial of questions (an estimated size of a loss). In any financial trouble, any competent financial adviser asks the question: “what is the loss”. Ms Tett also appears to be still some way from understanding that a global pyramid scheme is the crux of the current mess.
Here are further clues what I expect to read in the FT (and other high profile press) in some weeks or rather months to come. The size of globally committed stimulus package is $2 trillion dollars i.e. 1/572 of the outstanding notional value of derivatives (as estimated in December 2007 by BIS in Basel), which is $1.144 qn. And this is about 23 times the world’s GDP. This is an optimistic look at the figures.
It begs a question why papers like the FT or The Economist do not even consider such basics.
Here are further clues what I expect to read in the FT (and other high profile press) in some weeks or rather months to come. The size of globally committed stimulus package is $2 trillion dollars i.e. 1/572 of the outstanding notional value of derivatives (as estimated in December 2007 by BIS in Basel), which is $1.144 qn. And this is about 23 times the world’s GDP. This is an optimistic look at the figures.
It begs a question why papers like the FT or The Economist do not even consider such basics.
No comments:
Post a Comment