Synthic CDOs were just one example of the problem we didn’t learn. There’s a whole logic, risk and visibility problem around derivatives of derivatives. The fact that the CFTC has suspended swap reporting, and that we have a derivatives markets that is so massive and then we have derivatives (like swaps) based on those derivatives is a system designed to fail.
The derivatives market is over $1 quadrillion dollars large.
Synthic CDOs were just one example of the problem we didn’t learn. There’s a whole logic, risk and visibility problem around derivatives of derivatives. The fact that the CFTC has suspended swap reporting, and that we have a derivatives markets that is so massive and then we have derivatives (like swaps) based on those derivatives is a system designed to fail.
The derivatives market is over $1 quadrillion dollars large.
Yup, this site has a really interesting graph if anyone is interested.
Though it states 12.4 trillion or 600 trillion depending on valuation type.
https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2022/