Question regarding world Bankrupcy

You mean Obama's next budget will be over a quadrillion dollars? :D

Quote from nazzdack:

$1000 trillion is the same as $1 quadrillion. Be on the lookout for people "throwing" that number around soon. :cool:
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How are derivatives values calculated? I'm talking about interest rate swaps, credit default swaps etc I mean, what value do they have, their future cash flows?

I guess it's not the end of the world if bank A has 500 trillion of CDS on bank B while bank B has 500 trillion of CDS on bank A. The notional value might be 1 quadrillion but the cash exchanged is 0.
 
Quote from bearice:

World assets are worth $400 Trillion to $500 Trillion. This includes real estates, stocks markets, world GDP, gold.

Whereas world derivatives are worth $600 Trillion to $700 Trillion.

Does this mean the whole world is bankrupt????
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You need to look up "derivative" and "bankrupt." Only then will you be able to understand your own question. And when you understand that question, you will have your answer. Really.
 
Quote from nicuss:

No. Lets say X owes me 1 billion dollars in derivatives, and I owe Y also 1 billion in derivatives. In order to settle my debts I don't need any assets, I can just take what I get from X and fully pay Y. If, in addition, Y owed X 1 billion in derivatives, then all three of us could fully clear a total of 3 billion debt without needing a single asset. The word is full of such debt circles, almost everyone plays both sides of the game, so much less assets are actually needed to settle all derivatives in existance.

The big problem is that if lets say X became bankrupt in my example I'd be screwed, unable to pay Y, and I would have to go bust. Which in turn would screw up and bankrupt Y as well. This is why they didn't want to let the big banks and AIG go bankrupt, it would have fucked up the whole system. Or so they said.
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the ramp up of profit being made on the swapping fees,what you have left to pay x and he to pay y,could be considerably less,the barnacles have found a way to take over the ship,and the dumb ship is letting them
 
Quote from peilthetraveler:

The way to find out if you are bankrupt is to find out if your income is enough to pay your bills. In the U.S. our income is not enough to pay our bills, therefore, we are bankrupt.

The world debt as of the end of 2008 was 60.96 trillion dollars
The GWP (gross world product) was 61.22 trillion.
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This means the world is on the verge/brink of bankrupcy.
 
Quote from bearice:

This means the world is on the verge/brink of bankrupcy.
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You do know that the world is split up into economic "units" called countries. China is one of them. Are they on the verge of bankruptcy?

Yes, the global architecture of international trade and finance is broken, IMHO.... and it could end very badly. But your line of reasoning in this thread so far has been simplistic and misguided. You need to research a little more, before making these kinds of statements.
 
Quote from nazzdack:

$1000 trillion is the same as $1 quadrillion. Be on the lookout for people "throwing" that number around soon. :cool:
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Remember when they said, "A Billion here, a billion there... pretty soon you're talking about real money"...
 
Quote from nazzdack:

$1000 trillion is the same as $1 quadrillion. Be on the lookout for people "throwing" that number around soon. :cool:
More...

Remember when they said, "A $Billion here, a $Billion there... soon you'll be talking about real money"...
 
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