The Invisible One Quadrillion
Dollar Equation
Asymmetric Leverage and Systemic Risk
London, UK - 28th September 2008, 19:31 GMT
Dear ATCA Colleagues
[Please note that the views presented by individual contributors
are not necessarily representative of the views of ATCA, which is neutral.
ATCA conducts collective Socratic dialogue on global opportunities and threats.]
According to various distinguished sources including the Bank
for International Settlements (BIS) in Basel, Switzerland -- the central
bankers' bank -- the amount of outstanding derivatives worldwide as of December
2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories
of the USD 1.144 Quadrillion derivatives market were the following:
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.
Quadrillion? That is a number only super computing engineers and astronomers
used to use, not economists and bankers! For example, the North star is
"just" a couple of quadrillion miles away, ie, a few thousand
trillion miles. The new "Roadrunner" supercomputer built by IBM
for the US Department of Energy's Los Alamos National Laboratory has achieved
a peak performance of 1.026 Peta Flop per second -- becoming the first supercomputer
ever to reach this milestone. One Quadrillion Floating Point Operations
(Flops) per second is 1 Peta Flop/s, ie, 1,000 Trillion Flops per second.
It is estimated that all the data found on all the websites and stored on
computers across the world totals more than One Exa byte of memory, ie,
1,000 Quadrillion bytes of data.
[CONTINUES]
[ATCA Membership]
We welcome your thoughts, observations and views. Thank you.
Best wishes
ATCA: The Asymmetric Threats
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