Derivatives Market

What has protected the derivatives market up 'til now is that it's been 'off the books', and not talked about seriously.

The full extent of it is also hidden in so many ways to deny that the banks are busted. Every hedge fund is riddled with these; likewise sovereign wealth funds rated AAA which are actually FFF-.

They have talked non-stop about 'sub-prime' mortgages and tried to infer that they are the problem. Now, there are more new foreclosures on prime mortgages than on sub-prime.

Actually, sub-prime buyers...still working...are better risks than multi-millionaires with assets in the Stock Market or Hedge Funds, etc., that are getting margin calls and mortgage payment calls on everything that supports their affluent life-style.

Workers need homes and will make reasonable payments with a little help from loan modification programs and reduced interest rates until the economy is restored to health. The same is not true of the multiple homes of the wealthy.

Most of their wealth was 'on paper'--not marked to market-- where it's worth from 37% to 90% less than what they are carrying it for on their financial statements.

Every major bank is avoiding putting their holdings of derivatives on the books as it means they are bankrupt ... which they are.

Ashtar said that we may have to nationalize the big banks. He wasn't just blowing smoke.

Now, what to do? Put the Fed Reserve under the US Treasury; then write off all the worthless derivatives, nationalize the banks and dump their criminal management---if any are still in 'original' format after yesterday's arrests.

Then, reopen them as US Treasury banks with fresh flowers on all the tellers' windows.

Insurance guarantees of these securities are also worthless and will take them down, too.