Day 2: 12 Days of Xmas Quiz

Blacklight

An extreamly large value of 9.

Generali

Blacklight wrote: »

An extreamly large value of 9.

Did you mean to press the shift key?

vivatifosi

I have no idea what I am talking about, so will guess $3.1tn. Billions are for wimps.

Generali

Plenty more than that viva.

vivatifosi

Generali wrote: »

Plenty more than that viva.

Well that's more than a tad scary.

BobQ

Hell its not my money, I bid 50 trillion WAWAs

Generali

The total notional value of derivatives linked to LIBOR are about $450,000,000,000,000 or about £300,000,000,000,000. That compares to a world GDP (actually GP as the 'domestic' bit doesn't apply when talking about the world as a whole) of about $77,000,000,000,000.

The entire derivatives market of the world is estimated to have a notional value well in excess of $1 quadrillion: $1,000,000,000,000,000! That's a lot of dead presidents.

http://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp

A quadrillion dollars is what we economists call 'shed loads of cash'.

Derivatives products run the gamut from very sensible financial planning via expensive insurance to insane gambling (IMHO).

BobQ

Generali, do you know the value of actual frauds that were committed in London and elsewhere ( I mean the ones that have been found out)? Presumably that is much smaller.

Generali

BobQ wrote: »

Generali, do you know the value of actual frauds that were committed in London and elsewhere ( I mean the ones that have been found out)? Presumably that is much smaller.

It depends on how you define a fraud I guess. Is it the value of fraud agreed with regulators for the purposes of setting fines? How do you count some of the pretty egregious stuff that the banks and hedge funds have done down the years but blatantly got away with.

For example, I worked for a hedge fund that was simply incapable of doing what they claimed they could do. They charged so pretty impressive fees (2% management fee plus 20% of any money they made for the client with no hurdle). Is that a fraud? If so you could make an argument that most of the hedge fund industry is fraudulent.

Then with LIBOR, what do you neasure as fraudulent? Is it the extra profits made as a result of setting prices in a way advantageous to the fraudster? What about people on other desks at the same bank that lost money entirely innocently? I'll poke around though. Someone (Matt Levine?) will be keeping score for us.