Facing Off Against the Credit Derivatives Cabal

I'm no expert on credit derivatives, but I did see that Deloitte study and it is very disturbing.

I can't find a link to it now, but according to that study, most of the big firms out there have no idea what their derivatives risk exposure is or how to adequately account for it. The growth of the credit derivatives market had them especially concerned. Since the credit market is exploding so quickly, most of the firms that are diving into it are probably getting WAAAYYY over their heads. The kicker is that we won't even know the truth until the meltdown hits.
 
Risk of derivatives 'not fully evaluated'

Here's a link to an MSNBC article about the Deloitte study. I couldn't get my hands on the real thing because Deloitte makes you pay to download the PDF. It interesting stuff, though, if you can get your hands on it.

I perused the site with the original credit derivatives article at the beginning of this thread and found that they also have a podcast on the subject. It's primarily about options, but there is a lengthy discussion about the OTC credit market and new credit derivatives products from Eurex, CME and CBOE. Look for episode #4.
Credit Derivatives Podcast

This is the first podcast that I've ever heard on this subject, so I naturally gave it a home on my ipod. Anything that can take the place of that know nothing Cramer's podcast is a welcome addition indeed!
 
Thanks for the links. I might have to end up downloading that PDF just to read the nitty-gritty of the study.

I saw today that the OTC credit derivatives market has exploded over the past year. I think the number that I saw was around $34 trillion, which dwarfs even the $27 trillion that they mention in the article and podcast. If those numbers are correct, then we are definitely in for some trouble down the road.
 
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