THOUGHT FOR THE DAY!

"Imperialism today is taking place in the context of...the 'universalization' of capitalism. It is not now primarily a matter of territorial conquest or direct military or colonial control. It is not now a matter of capitalist powers invading non-capitalist powers in order to bleed them dry directly and by brute force. Now it is more a matter of ensuring that the forces of the capitalist market prevail in every corner of the world (even if this means marginalizing and impoverishing parts of it), and of manipulating those market forces to the advantage of the most powerful capitalist economies and the United States in particular." ... "Military force is still central to the imperialist project, in some ways more than ever."-- Political scientist Ellen Meiksins-Wood, Z magazine Nov 1999, p26

 

HAPPY 'KICK OUT THE GOVERNMENT' DAY!!!

 

Lehman: The Counterparty Risk

As we write this, CNBC is reporting that Lehman Brothers, Inc. (LEH) has a notional amount of outstanding OTC positions of nearly $800 billion. Since Lehman is going into bankruptcy, what does that mean for the rest of the financial markets?

Each of these trades has a counter party, an institution that is expecting to pay off or get paid according to the terms of the agreement.

Webmaster's Commentary: 

The music has stopped, and there is a shortage of chairs.

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Posted on Sep 14, 2008 at 22:10
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Comments

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Third parties will now be known.

roadrunner1234

The problem with the derivatives and swaps is that a lot of the time the buyers do not know who the sellers are and vice versa. This creates a problem when the market falls apart. There can also be third parties who have bought in or bet on the transaction that are unknown. This is going to be real interesting.

09/15/2008 - 02:16

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