According to a report out last week, there is huge off-balance-sheet debt guaranteed by Greece and the other PIIGS, Portugal, Italy, Ireland and Spain. In addition to similar debt guarantees issued by other governments.
Gordon Long, founder of a private venture-capital fund, said in an investor note that there is more than $600 trillion in notational value in the global derivative market, with $437 trillion of it tied to interest rate swaps.
"Any credit event could trigger a cascading event," Long wrote in the report, according to NyPo. "It does not have to be default; it could be a downgrade in swap contracts that would do the trick for a collateral call. Something is going to cause it to topple, whether it's a situation in Dubai, Greece or New Jersey." (more)
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