consequences of recession
consequences of recession
Out of context: Reply #9
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- monNom0
from what I gather, the 500Trillion worth of derivates backed by absolutely nothing has a big part to play in it. subprime was just a trigger.
essentially when those contracts get cashed (like when Lehman brothers went bankrupt) it sucks money out of the banking systems like a big vacuum, because all the banks hold a little piece of each other. They all ask for their money back to cover off the insurance policy at the same time, or risk going under themselves. It's a bank-run by any other name, and it's on the whole banking system.
- BTW 500Trillion is about 11 times world GDP, so that's alot.monNom