The 50-60 odd trillion dollars of nominal face value in credit default swaps taken on end-of-bubble vintage mortgage backed securities on a grand scale are part of this ostensibly 600 trillion dollar derivatives market, which can be puzzling when you figure the entire stock market, for example, is worth something like 40 trillion dollars, or the size of the bond market is $45T.
It's an obtuse way to measure it. This helps:
An alternative way to measure the size of the derivatives market is to calculate the instruments' market value—which refers to how much they would be worth if the contracts had to be settled today. Gross market value of all outstanding derivatives was $14.5 trillion at the end of 2007, less than one-fortieth of the $596 trillion estimate [of nominal face value]. (That number shrinks to about $3.3 trillion once you take into account contracts that directly offset one another.)
:: posted by buermann @ 2008-10-16 14:05:46 CST |
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