logo
  Join        Login             Stock Quote

The Market Ticker - Where Is THAT ($1.7 - $10.2 Trillion) Going to Come From?

 November 29, 2012 11:29 AM


Gee, who's been talking about uncollateralized lending and the inherent fraud that is created by such transactions in that they are effectively a naked short on the currency involved?

Swaps that will be allowed to remain outside clearinghouses when new rules take effect in 2013 will require traders to post $1.7 trillion to $10.2 trillion in margin, according to a report by an industry group.

The analysis from the International Swaps and Derivatives Association, using data sent in anonymously by banks, says the trillions of dollars in cash or securities will be needed in the form of so-called "initial margin." Margin is the collateral that traders need to put up to back their positions, and initial margin is money backing trades on day one, as opposed to variation margin posted over the life of a trade as it fluctuates in value.

[Related -Bank Stock Could Soar 30% After It Exits the Penalty Box]

This, my friends, is the amount of margin in the amount of actual hard funds that is supposed to be tied up in the form of collateral to back these bets but currently is not.

Oh, and if you're wondering how that compares against the actual amount of "un-cleared" swaps?  That's "estimated" at $127 trillion, which means that the ISDA thinks it's perfectly reasonable for people to have somewhere between 12 and 75 times leverage in these things.

[Related -Thinking Clearly About Forecasting]

That's utter and complete crap but it is what passes for an alleged "cleanup" of this "market."

Bernie!  Oh Bernie!  Is that you Made-Off?

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageThinking Clearly About Forecasting

There’s a pernicious rumor making the rounds that economic and market forecasts are accurate. There’s also read on...

article imageThe Fed Concerned About Importing Disinflation

The latest Reuters poll is showing 24 out of 43 economists projecting the first rate hike in the US by June read on...

article imageClearing Up Bond Trading

How far do regulators’ rule proposals go for improving transparency for bond read on...

article imageThe Unnecessary $2 Trillion Global Stimulus Economic Benefit Concert

The G-20’s vague, unlikely-to-materialize stimulus plan is nice sounding, yet read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

The Fed Concerned About Importing Disinflation
More Articles on: Finance



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.