DK Matai - November 08, 2008
Dear Friends, there is a rising myth of the single bubble which suggests that The Great Unwind -- manifest as the global credit crunch -- is essentially about subprime mortgage default, a USD 1.5 trillion challenge. The truth is that there are as many as eight bubbles at play which are in the process of bursting, taking the form of deleverage on an unprecedented scale.
Even 1929 pales in comparison. At a recent ATCA roundtable we posed the following questions for Socratic dialogue:
I. If the Dow Jones Industrial Average has fallen from above 14,000 to below 9,000 as a result of the subprime mortgage bubble collapse, ie a 5,000+ points drop or 33% decline, where will the equities market reach by 2010 as other larger bubbles burst?
II. If the world government bond market is around USD 30 trillion, how can governments rescue the eight bubbles bursting step by step with an ever larger quantum and momentum? What ought to be the focus at Bretton Woods II starting November 15th?
There are at least eight bubbles in play worldwide and their approximate scale is as follows:
1. Subprime Mortgage linked Loans and other Assets (USD 1.5 trillion);
2. China, India, Eastern Europe and other Emerging Market Loans (USD 5 trillion);
3. Commodities (Commodity Derivatives at about USD 9 trillion);
4. Corporate bonds (USD 15 trillion);
5. Commercial (USD 25 trillion) and Residential property (USD 50 trillion);
6. Credit Cards Outstanding Debt (USD 2.5 trillion);
7. Currencies (Foreign Exchange Derivatives at about USD 56 trillion); and
8. Credit Default Swaps (USD 58 trillion) as a subset of all Derivatives (USD 1,144 Trillion).
In the ATCA briefing, "The Invisible One Quadrillion Dollar Equation" we discussed the main categories of the USD 1.144 Quadrillion derivatives market as quoted by the Bank for International Settlements in Basel, Switzerland:
1. Listed credit derivatives stood at USD 548 trillion;
2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:
a. Interest Rate Derivatives at about USD 393+ trillion;
b. Credit Default Swaps at about USD 58+ trillion;
c. Foreign Exchange Derivatives at about USD 56+ trillion;
d. Commodity Derivatives at about USD 9 trillion;
e. Equity Linked Derivatives at about USD 8.5 trillion; and
f. Unallocated Derivatives at about USD 71+ trillion.
The relative scale of the world's financial engine is as follows:
1. The entire GDP of the US is about USD 14 trillion.
2. The entire US money supply is also about USD 15 trillion.
3. The GDP of the entire world is USD 50 trillion. USD 1,144 trillion is 22 times the GDP of the whole world.
4. The real estate of the entire world is valued at about USD 75 trillion.
5. The world stock and bond markets are valued at about USD 100 trillion.
6. The big banks alone own about USD 140 trillion in derivatives.
7. The population of the whole planet is about 6 billion people. So the derivatives market alone represents about USD 190,000 per person on the planet.
Assuming a 10% conservative default or decline in asset value, this could be a USD 100 trillion challenge on the base of a Quadrillion. What are the likely outcomes? We are keen to receive your answers and solutions. Please note that the numbers quoted are a rough guide.
[ENDS]
We welcome your thoughts, observations and views. Thank you.
With love and warm wishes to you and family
DK with family
DK's online community participation includes:
Open ATCA, IntentBlog, Holistic Quantum Relativity Group, LinkedIn, Facebook, Ecademy, Xing, Spock, A&B Blog and QDOS. [Profile in pdf]
A new Holistic Quantum Relativity Group is being set up here.

Holistic (H) E8 Vector Visualisation in String Theory (Q+R) like the 1,000 Petal Sahasrara Lotus in Spirituality
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Posted by DK Matai at November 8, 2008 01:15 AM
Dear DK
When reading over your commentaries, I have noticed an interesting proliferation of "de" words: deleveraging, decoupling, deflation, default, devalue, departure, devastation, debacle, destruction and, last but not least, debt. The prefix "de" means removal, reduction, reversal, separation, or negation. The word debt comes down to us from de'-habere" "to have not"
Trillions of dubious "value" have vanished into thin air, without even a puff of smoke to mark their departure.
Meanwhile the central banks are printing money around the clock creating more fiat currency. The most likely outcome of this is that when the de-flationary phase of losses finally unwinds, the economy will be whipsawed into stagflation(a combination of stagnant economics plus fiscal hyperflation.) When that happens, we should be prepared for oil, gas, and food, among other things, to shoot up to prices of now unimagined levels. Even though that sounds gloomy, it is wise to be prepared.
Thank you for these commentaries. I always find them interesting.
Best wishes,
Bonnie
Dear DK,
I thought it was obvious that it wasn’t just the mortgage crisis; it’s the fundamental system design flaws and gambling. Well perhaps everyone is making a big deal out of nothing. It’s just numbers and a bunch of perceived artificial wealth. It’s an accounting system. We are just talking numbers nothing tangible or real. Do some adjusting entries and have everyone just pay back the principle due with no interest.
This wasn’t genuine prosperity it is artificial prosperity, a lot of people must have been living a big illusion.
Sure some had their bets insured and the insurance can’t cover all the claims, oh well, that’s deregulation and opacity for you, and the small pockets should see no effect, it is a loss to born by the big pockets not the average citizen on the planet via taxes which is nothing more than business owners taxing the working the class through an intermediary.
If it’s true 2% of the population controls 90% of the wealth then they should pay to solve 90% of the problem not the citizens.
Management Failed to create revenue channels to supply the credit pipes. The economy and the war are also contributing factors. Remember war does not provide value to the economic system participants with a couple exceptions those that finance war and build military hardware profit.
Do some adjusting entries and have everyone just pay back the principle due with no interest.
DK:
I've been meaning to share this with you for some days now.
I have a very wealthy friend here in Zürich. He has never worked a day in his life. He owns 25 vintage mint condition American automobiles. He owns many of the 13 story apartment buildings around the Tremli area, and you know 13 story buildings are rare here in Switzerland. He owns real estate from here to Geneva. Not here and Geneva. Here, Geneva and everywhere in between.
Now he didn't create his wealth. It was given to him upon his fathers death.
So when I talked to him this Tuesday, having not spoke to him for about a month, I asked him how the global financial crises was effecting him. He said pretty much not at all.
He told me that 6 months ago some Swiss financial genius friends of his had warned him of what was coming. He called his bankers and they all played dumb to what was about to come, and believe me, the banks saw this thing coming even before you first reported it here on IB.
But what his friends told him was, if he owned stock, which he has not one rupen of, or he was holding high mortgages, which he does not (all his properties were paid off long before he inherited them) he would be in for a financial beating.
He spoke to his financial wizard friends this month. He wanted to know what to expect now.
What they have told him is that what we are seeing is the tip of a very large storm that is going to change our world forever. The big guys know it, which is probably why they walked out of that first meeting with Bush and the financial boys in September white faced.
They told my buddy that the big boys will not be completely honest with us because they need a bit of time to build the fortresses they will need to survive what many of us will not be able to survive.
By sometime next year there will be an incredible, artificially created, rally in the markets.
Then in 2010, 2 years from now, bang. Bust. The party will be over. If you own stock, they have told him, get rid of it. Every share.
My only disclaimer is that I am not an economist and really know very little about economics. In some way one does not need to be an economist to have seen this coming.
Good luck everyone.
Richard:
I wish I could agree with you.
I so much want to.
I have small pockets and, as of this moment, have felt almost no effect from this "illusional", financial meltdown.
Ok the restaurants that I don't go to, for some time now, have gone from $29.00 for a good meal to $50.00+. But it doesn't "really" effect me because I don't go to them (anymore).
I even attempt to distance myself from the truth of what is to come by telling people that only those with much, have much to loose. I have nothing and therefor nothing to loose,
However, Richard, when the price of our basic needs become more then we can pay for, heat, food, water, clothing and shelter, even we who have little will be effected.
The hope will be in community. I didn't want to go back to the cave and believe me I won't. But we will be stepping back more then a few generations in order to survive.
The plus from this is that the planet desperately needs a reduction in industry, production, over use and population.
Looks like (R) evolution is taking its course.
Interesting thread this is ...
#2^ Bonnie (Hi),
Couldn't help thinking.. What about Development?
~ R ~
NPR had an excellent segment on forgiveness and revenge.
Instead of expressing forgiveness in terms that cast it as remote or difficult, running contradictory to our natural impulses, the speaker asserts that natural selection of our species FAVORS those who practice forgiveness. In fact, he proposes that our ability to forgive mistakes of those BEYOND our family is what sets us apart from other mammals and enables the very crafting of endeavors far beyond our caves in distance and scope. Put otherwise, the inability to forgive renders our members outmoded, unlikely to survive.
It told the story of how a parent of one of the victims of the Oklahoma City bombing visited the father of Timothy McVey at his home. While they were talking, the father said of a photo of a young boy on the mantle, "God, that's a good looking kid."
It was then that they knew they were bonded as parents who were losing their children.
Me? Personally? Given what I was up to in my teens and twenties, I'm fortunate to be alive--at all--and to be asked to contibute to society's endeavors by those who have forgiven me and others like me.
I suppose it would follow (even though the program didn't suggest this), that natural selection would likewise favor those who seek forgiveness and strive for restitution.
Okay. Thanks, all, for allowing me to blanket IntentBlog with my various musings. I had some extra time on my hands, and it was a nice place to go...
Eight Bubbles: The numbers are suggesting that financial viagra in the form of various bailouts will do no more in bringing youth to the economic health of US than the actual viagra does to bring youth to an old, really spent man or rather congressman lol. It may rather eventually prove dangerous for its heart.
Hi Ruch
#6
This is one of those times when words do seem to ooze meaning.:) How this de-velopes or manifests
in the physical world remains to be seen.
I do think it will be a challenge for all of us.
Nice to meet you,
Bonnie
Ha, the figure of eight, who can grasp it? Wasp-waisted.
The figure of eight, a standing one and a lying one combined, form a human body.
"I am God, so now what?"
This is the newest book from Steve Rother from Lightworker dot com.
Well, weaving ones own Universe by just breathing in and breathing out along those two eights is an endless weaving of a wonderful web of experiences in love and light.
It lasts at least a lifetime :)
The labyrinth is a symbol that can be compared to it.
Love and light from the middle :)
Mieke
http://www.youtube.com/watch?v=iF2__-K8qFo
#10 > Nice to meet you too Bonnie.
# 12 & 13 > Thankx Meike for the wonderful info. you pour
~ R ~
Hi Ruch,
You are very welcome.
Here is another one referring to someone who was very good in new horizons when I was young(er):
http://fusionanomaly.net/aglobeclothingitselfwithabrain.html
Pierre Teilhard de Chardin wrote a book about the desire to be human and talked also about the human motivation to give meaning to life.
He inspired me much.
Love, Mieke
Hooray for Pierre!
:)
Yes, hooray! A milestone of a man for me, in spite of kilometres :)
Hi Everyone,
Can someone please help me w/the term/concept of "duality" & "non-duality"? - as it is referenced often in posts by DK Matai. Perhaps a reference to web post... Any help would be appreciated.
Thanx to all for the thoughtful & thought provoking posts & comments.
Wishing all, feelings of safety, love and peace -
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(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)Hi Everyone,
Can someone please help me w
Yes, hooray! A milestone of a man for me, in s
Hooray for Pierre!
:)
Hi Ruch,
You are very welcome.
#10 > Nice to meet you too Bonnie.
# 12
DK, I've read your recent posts very carefully to get a sense of the landscape you're seeing. I'm not a economist, and I don't purport to know a lot about it.
But I also get hunches about stuff that later seem right on the mark. As I'm getting older, I'm learning to listen to them.
On a recent post, I wrote about the 22nd Amendment to the US Constitution (presidential term limits). My gut sense is that it is one of the components contributing to our dilema and hazardously detrimental to encouraging healthy change.
Because of it, we have come to equate change with reversal. We are completely habituated to experiencing startling reverses bereft of compromise, even lamenting that this is the price we pay for freedom. God Bless (or Damn) America.
How could it be otherwise?
It's like you and I got a brand new car, and we have to share it. I like putting the car R and backing up (there's ALWAYS a need to back up), and you like to put it in D and drive forward (because driving backwards is obviously stupid). And because you and I can't agree on a strategy beyond switching back and forth every five minutes, we're doing little beyond wearing a hole in the driveway and wasting a perfectly good car (not to mention inviting the ridicule and consternation of our neighbors who think we ought to be put away.)
We seem unable to create a structure of rules that identify our mutual desire for a change of scenery because we hardly even know what change is!
Change is birth and death and timing and a few nice surprises over the hill. It's the anvil on which wisdom is shaped.
Reversal is simply refusal. Shattering refusal, in fact.
Change is about the amount of sacrifice I can accommodate because I like the general direction you're headed in. The same for you. It's exactly like sailing. It's all about managing resistance.
I like people who know how to sail. They know things differently. Were it not for a keel to provide strong resistance in only two directions, the boat would simply wander out of control. The same holds true for the sails which operate on a whole different set of principles. Keel and sail rarely agree, and when they do, it's the most boring sort of sailing there is, downwind.
So which is it, the wind or the water that makes the boat sail? Who's sailing? You or I? Which of the two is more important? Is it the wind's sail and the water's keel? Or perhaps the water's sail and the wind's keel? It's beautifully wholistic and impossible to parse.
It's the excellent marriage of principles.
I think there has to be a way to meld the ideas of somebody with Dennis Kucinich with those of Ron Paul. That mutuality isn't just a mish-mash of compromises forcing us into utter banality; instead, here is some God-Intelligence back of striking deals with each other.
What do I know about both Ron Paul and Dennis Kucinich? Among the Apostles of Refusal, both are considered quacks. Knowing that makes me yawn. What else do I know about them? They both walk around with pocket versions of the United States Constitution in their pockets, and, evidently, they're friends.
Now that excites me.
DK, please keep inventorying. We have stuff to work with. There's a steady wind and the water is, shall we say, shimmering.