Rockabye Baby

I was reading the financial news this morning, and found some interesting factoids. I have thought for a long time that the collapse of the US economic system was inevitable, and that would take the rest of the world down with it.

"Take a look at the published derivatives to asset ratios at major US banks and start to worry.

JP Morgan, 35:1, Citibank 40:1, BoA 32:1….Goldman Sachs 450:1. The average across the major US banks’ office is roughly 25:1.

And bear in mind….these ratios have much more profound consequences than a few rich folks failing to get the greedy IPO returns they were expecting. A tiny percentile degree of calling in such obligations would result in the US banking system being flattened.

A 0.25% realization of Goldman’s crazy exposure would wipe out its assets.. A 3% realization would take JPM, Citibank, and Bank of America off the table….along with pretty much the entire global banking system.

I do hope I didn’t spoil your digestion for Tuesday night out. But equally, I do hope just a few of you who don’t understand what’s happening in the market might pull their fingers out of their ears and get real."


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