Stock market time bomb?

[tsaw]

While banks all over the world were imploding and some $50 trillion vanished in global stock markets, the derivatives market grew by an estimated 65 percent, according the Bank for International Settlements. BIS convenes the world's 57 most powerful central bankers in Basel, Switzerland, for periodic secret meetings. Occasionally, they issue a cry of alarm. This time, derivatives had soared from $414.8 trillion at the end of 2006 to $683.7 trillion in mid-2008 - 18 months' time.
The derivatives market is now estimated at $700 trillion (notional, or face, value, not market value). The world's gross domestic product in 2009: $69.8 trillion; America's, $14.2 trillion. The total market cap of all major global stock markets? A mere $30 trillion. And the total amount of dollar bills in circulation, most of them abroad: $830 billion (not trillion).


http://www.washingtontimes.com/news/2010/may/10/stock-market-time-bomb/

Black Monday coming up 5-10-10

 

[Melensdad]

Sunday the EU was in a tizzy, the news sources watching this stuff were reporting hourly about progress made on the upcoming bailout of Greece and the salvation of the Euro as a currency. This derivative mess is simply gambling and very few people really understand it and it makes fewer headlines that the riots in Greece. But the repackaging of debt, in bundles, and buying the risk and passing it on to the next guy as a sure thing cannot be good.

So this morning I see the news that the EU accomplished their goal, they came up with a trillion dollar bailout and everyone is happy. The stock markets today will skyrocket. I expect that will overshadow any news on the derivative front. At least for now.

But did the EU SOLVE the problem or simply DELAY the problem? And if it hits at the same time the derivative bubble bursts???

Will the Greeks finally admit they can't afford their lifestyle that allows for months of paid vacations and funded retirements that begin in their 50's? The new measures push retirements into the mid 60's, cut wages of public sector employees, cut benefits, etc etc and so far the unions, the socialists and the communists all have replied in the same way, with violence and murder in the streets of Athens. It will be interesting to see what this week brings.