The more I read about this crisis, the more pessimistic I become. The amount of credit defaults swaps out there is just mind-boggingly ridiculous… an estimated $62 trillion dollars.
The 2008 estimated global GDP is only $65 trillion.
That means we have insurance policies out there looking to collect when various banks and other institutions fail for 95% of our global economy.
I don’t really know enough about this to comment anything meaningful, but it seems really quite scary. You just can’t pay out on policies when everyone is effected. That’s not how risk-management works.
It’s like the whole world is flooded, and everyone wants to collect on their flood insurance.
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