Sheer scale of misunderstanding?

The derivatives numbers quoted are assuming a total loss

I contract (bet) with you that Oil will be $100 in a years time and I want 100 barrels - thus if I exercise my option I will pay $10,000

In twelve months the price of oil is $90 - so I can buy spot at $90 I don't use the derivative, I might lose $1000, but it might even be lower as I could in theory close my position earlier if I was out of the money

But if the price is $110 per barrel I pay $100 and re sell at spot for $110 making my bank $1000 bucks

Of course in reality you keep the oil you just send me money.

I am not a trader or an expert so feel free to correct me.

Thus your $4.48 trillion of exposure might "only" require $500bn to wind up all trading positions.

Strange state of affairs really isn't it? People will mock localism movements like the Transition stuff as "hippies", yet look at some of the idiots we vote in...

A new phrase I've heard is "Glocalism", which is based around the idea of local networks (Transition or whoever) using communications technology to exchange ideas with other such movements around the World. The key difference between that and Globalisation is that people increasingly view themselves as an active part of where they live rather than simply a unit of consumption. That's where I've found some of Kramer's stuff interesting, as he dicusses how to de-tune yourself from the reality other people want you to experience (chiefly advertisers and mass media) and reasses it on your own terms. That can sound like new age waffle or tinfoil central, but I think there's a truth to it without the need to go all David Icke. We're all products of the society we exist in, so we're all programmed (in the non-NWO sense) to some extent. Recognising and challenging that strikes me as a fascinating subject, even if it does invite a fair amount of mumbo jumbo. Look at how much the world has changed in the last 30 years alone and how much of that change we now view as "normal", even though it's historically anything but.

I agree, - however my wife doesn't and neither does the dinner party set I move in.

Despite years of running bangers/sheds - whilst the Jones stock up on weapons of teutonic uber barging, I am still not able to fully let go.

EU could limit withdrawals from cash machines if Greek exit tips eurozone into deeper crisis

Could, might, this is where we are.

So the way to protect a currency designed to enable free trade across borders is to impose currency controls? Nice. Would be amusing were it not so serious.

There ought to be a thread about that

If the cash machines stop paying out enough, queues at banks, all banks, meltdown. I'm finding it hard to believe they could be so crass, unless it is deliberate.

As my dad used to say, 'would you trust these people to organise a piss up in an underground lavatory'.

EZ Steffan rather than EU - though in truth the difference may ultimately be academic.

It would be easy to limit the withdrawal of cash from cash points unofficially. Just 'upgrade' a few systems to the point of endemic failure. Or outsource a task of physically stealing the machines in huge numbers and claim that replacing them is problematic due to the shortage of a specific small part manufactured only in a factory in an area that has recently been subjected to a natural disaster.

The BBC is now outlining the return of the highest bond rates since the Euro started in 199 paid today by Spain at 6.81% see: http://www.bbc.co.uk/news/business-18405729

Under the article entitled: Spain borrowing costs hit euro-era record high.

The BBC go on to say:


In Spain, shares in the biggest lenders Santander and BBVA fell 1.3% and 0.9% respectively following the Fitch downgrades, but then clawed back the losses.

In Asia, the Nikkei 225 index closed 1% down while the Hang Seng index dropped 0.6%.

After an initial relief rally following the 100bn-euro ($125bn; £80bn) bailout of Spanish banks over the weekend, analysts said the markets had returned to a mood of caution.

"This is a realisation that Spain, while providing money for its banks, is going to add to its debt-to-GDP ratio," said Paul Zemsky, head of asset allocation at ING Investment Management.

"They're borrowing more money, not doing anything about growth," he added.

"Today we're not worried about Spain's banking system falling off a cliff, but other than that, nothing's changed."

How True How True. Which is precisely what contributors on PH have been saying. For over a year. I do think the realisation that the Euro as structured really cannot continue, is beginning to grip the mainstream media.

Reality is gradually percolating through the layers of huff and puff, that the EU are spouting to deny reality.

I think all we can do is attempt to assess the probability, of the collapse being sparked by an event which the EU cannot hide.

Looking at the position of Greece or Spain in some depth IMO recovery is factually impossible. Neither country can generate sufficient output to enable recovery to commence. They are, economically, way beyond the recovery point. The desperation of the bleak future, makes me acutely aware that we should explore all the possibilities.

I am looking to PH for some ideas here. Is there an real alternative to a complete lengthy and massive series of defaults? Can anyone suggest a recovery process that does not fly in the face of reality? Could a plan that actually faced the problems, be made to work for the HBAT's?

I think that there is no such opportunity, but I an interested in the opinion of others.