Banks are over leveraged 2 QUADRILLION dollars in derivatives. This will be the worst financial collapse EVER. – Investment Watch

by VotingIsForLosers

A derivative is a contract that derives its value and risk from a specific security (such as a stock or commodity), hence the name derivative. Derivatives are sometimes called secondary securities because they only exist as a result of primary securities such as stocks, bonds, and commodities.

The four main types of derivative contracts are options, forwards, futures and swaps.

Banks use derivatives for hedging, to reduce the risks involved in the bank’s operations. For example, a bank’s financial profile may make it vulnerable to losses from changes in interest rates. The bank could buy interest rate futures to hedge.

Derivatives are a high-risk instrument. The volatile nature of derivatives can lead to large losses. In addition, the contracts are designed in such a way that it becomes very difficult for investors to value them.

Worse than 2008: Big Short investor Michael Burry says current economic downturn could beat Great Recession

Famed investor Michael Burry delivered arguably his most dire warning about the current US economy yet on Thursday afternoon, suggesting he worries the ongoing downturn could be worse than the Great Recession.

Burry, the head of Scion Asset Management, noted that one of his market analysts called his comments “spooky” because he expressed concerns on Sept. 29, the anniversary of a 777.68 drop points in the Dow Jones Industrial Average in 2008 which ranked at the time as the largest single-day drop in history.

“I wondered out loud today if this could be worse than 2008,” Burry said in a now-deleted tweet. “What interest rates are doing, exchange rates globally, central banks seem reactionary and in [cover your a–] mode.”

The big crash is here. Mr. Bear Sterns Is Good In 2008 Jim Cramer Says Credit Suisse Is A Great Franchise As It Goes Up In Flames.

Credit Suisse, the current holder of Archego’s GME short positions, is on the brink of collapse. 48 billion in shorts they owe can’t close.

House prices fell at the fastest rate since Lehman’s bankruptcy

‘Dr. Doom’ Nouriel Roubini says the debt crisis is here and a hard landing before the end of the year is now the default scenario

The global economy is showing signs of a rapid downward shift as it faces a series of shocks, some of them self-inflicted by policymakers, that increase the likelihood of another global recession and the danger of major financial disruptions.

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