4 ms·

Is $203T in derivatives held by top banks causing an ‘everything bubble’?

23 points by hhs 3y ago

CyberDildonics 3y ago
An "everything bubble" is called inflation.
- malaysanghi 3y ago
  Everyone talks about inflation. We need a new term.
  - CyberDildonics 3y ago
    You don't need new terms to keep talking about the same thing, this isn't javascript or databases.
    - herbst 3y ago
      > this isn't javascript Made my day. Much love
  - euroderf 3y ago
    House of cards.
iamgopal 3y ago
203T is underlying value right ? Not the actual options and future value ?
- fuzzfactor 3y ago
  The underlying value has been spoken for a long time ago. The derivatives are the bets being placed on the performance of that (remaining) underlying value. Kind of like private gamblers on a horse race putting up more money amongst themselves than the entire prize package for the actual participants in the race. These are two completely separate groups anyway. It could be worse, it could be a rat race. Oh, wait . . .
- credit_guy 3y ago
  It's notional. The actual quote from the report [1] is > Derivative notional amounts decreased in the third quarter of 2023 by $17.7 trillion, or 8.0 percent, to $204.2 trillion. The vast majority of all these derivatives are collateralized, and the collateral is updated daily. They are also subject to some form of extra collateral called (improperly) "initial margin", so in case one bank goes down for some reason, it doesn't take its counterparties with it. [1] https://www.occ.gov/publications-and-resources/publications/quarterly-report-on-bank-trading-and-derivatives-activities/files/q3-2023-derivatives-quarterly.html https://www.occ.gov/publications-and-resources/publications/...
paulpauper 3y ago
everything bubble except gold , oil, and other commodities. Or treasuries. Right now the gains seem concentrated in AI and chips. Apple and Tesla have not participated at all this year.
- shapefrog 3y ago
  > everything bubble except gold , oil, and other commodities and wages for everyday working joes but Nvidia tho
  - kragen 3y ago
    i answered your question at some length on the other thread in https://news.ycombinator.com/item?id=39469828 https://news.ycombinator.com/item?id=39469828 i think you will find the answer extremely informative; it should change your picture of the world significantly. i'm interested to hear what you think
deleted 3y ago
[deleted]
euroderf 3y ago
Are financial markets (of all varieties) required to provide timely, structured reporting ? Then could ya throw an A.I. at it all ?

23 points by hhs 3y ago

CyberDildonics 3y ago

An "everything bubble" is called inflation.

malaysanghi 3y ago
Everyone talks about inflation. We need a new term.
- CyberDildonics 3y ago
  You don't need new terms to keep talking about the same thing, this isn't javascript or databases.
  - herbst 3y ago
    > this isn't javascript Made my day. Much love
- euroderf 3y ago
  House of cards.

iamgopal 3y ago

203T is underlying value right ? Not the actual options and future value ?

fuzzfactor 3y ago
The underlying value has been spoken for a long time ago. The derivatives are the bets being placed on the performance of that (remaining) underlying value. Kind of like private gamblers on a horse race putting up more money amongst themselves than the entire prize package for the actual participants in the race. These are two completely separate groups anyway. It could be worse, it could be a rat race. Oh, wait . . .
credit_guy 3y ago
It's notional. The actual quote from the report [1] is > Derivative notional amounts decreased in the third quarter of 2023 by $17.7 trillion, or 8.0 percent, to $204.2 trillion. The vast majority of all these derivatives are collateralized, and the collateral is updated daily. They are also subject to some form of extra collateral called (improperly) "initial margin", so in case one bank goes down for some reason, it doesn't take its counterparties with it. [1] https://www.occ.gov/publications-and-resources/publications/quarterly-report-on-bank-trading-and-derivatives-activities/files/q3-2023-derivatives-quarterly.html https://www.occ.gov/publications-and-resources/publications/...

paulpauper 3y ago

everything bubble except gold , oil, and other commodities. Or treasuries. Right now the gains seem concentrated in AI and chips. Apple and Tesla have not participated at all this year.

shapefrog 3y ago
> everything bubble except gold , oil, and other commodities and wages for everyday working joes but Nvidia tho
- kragen 3y ago
  i answered your question at some length on the other thread in https://news.ycombinator.com/item?id=39469828 https://news.ycombinator.com/item?id=39469828 i think you will find the answer extremely informative; it should change your picture of the world significantly. i'm interested to hear what you think

deleted 3y ago

[deleted]

euroderf 3y ago

Are financial markets (of all varieties) required to provide timely, structured reporting ? Then could ya throw an A.I. at it all ?