Still in shock, Christine Lagarde lets a selfie fall from her grasp

World exclusive: terminology table revealed for first time, seen to have no legs

As Ben the Banker lit his blue touch taper this week to the tune of 10 billion bucks, on the same day, slightly higher numbers were being tossed about with recklessly quiet abandon by the Commodity Futures Trading Commission (CFTC).  It announced casually that technical errors (known on the eurovision side of the Pond as ‘glitches’) at two swaps data repositories, which collect and supply regulators with transaction data, had caused the CFTC to under-report the size of the swaps market. By a trifling $55 trillion.

There is no way any sane human can put a number that big into perspective, but I’ll try and have a crack at context. World gdp last year (2012) was $71.83 trillion. The American gdp is $15.2 trillion.

Hilariously, the Wall Street Journal called the miscalculation “a lack of clarity”, continuing its piece on the glitch by observing that the murkiness thing ‘may undermine a key plank of the 2010 Dodd-Frank law aimed at bringing transparency to the opaque derivatives market.’

Well, yes, I suppose it would just a little. Mind you, it also puts into perspective the “massive €55billion fund” created by the Eunatics on that very same day, which “will be more than enough to handle any bank failure”.

More than enough for a failure maybe: but could it handle a glitch?

Perhaps what we’re needing is more clarity on the mathematical hierarchy of terminology here, or as my chum Hugo is fond of saying “Like, whichTF way is up here”. This was and possibly will be the table of terms as approved at Basel VIII some time in the near-future past:

The basic unit is a bond issue

There are two attempted bond issues in a shortfall.

Five shortfalls in a central bank plea

2 central bank bailouts in a failure*

1000 failures in a futures glitch

1.3 futures glitches in a global economy

20.2 global economies in a derivatives market

*Rules do not apply to Monte Del Peischi Bank, through dint of being Italian.

It’s always good to clear this sort of thing up, because if nothing else it reminds us of the exact nature of globalist banking’s funny-farm loopy-loo land of ‘wealth creation’. I mean, if there’s all that wealth in the world, WhyTF is anyone still working?

Here’s another piece of maths that should be on every educational syllabus around the world, and fully understood by all learners by the age of 12: the total derivatives market globally is $1.4 quadrillion. That’s $1,400 trillion. Before anyone touches the €55bn ‘special EU fund’ for dealing with bank failures, we the formally-termed creditors formerly known as the customers will be asked to cough up.

The total EU population was estimated at 503.7 million a year ago. That does include Evangelos Venizelos who counts as 37 people, but for simplicity let’s call it half a billion, and the total derivatives economy €1 quadrillion.

One derivatives netting glitch affecting one eurobank (and it almost certainly would affect far more than that) would require every eurozone personal bank account to be emptied to pay off just 7.5% of it. 

The loons will try it on, but it’s not going to work is it?

Talking of which, the sun’s out and I must return to work on the garden.

PS and Good Morning America: the 9 top US banks are exposed to a quarter of all world derivative trades.

Earlier at The Slog: Ben and Jan go tapering