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There are at least two ways in which a failure at Bear Stear might have precipitated a decimation of the Wall Street financial community.
First, as of Nov 30, 2007 Bear Stearns was counterparty to 13 TRILLION in derviatives contracts, as shown in their most recent public 10K Filing with the SEC. (hat tip to jerrbear from PrudentBear for tracking down the reference page. Great catch!).
As of November 30, 2007 and 2006, the Company had notional/contract amounts of approximately $13.40 trillion and $8.74 trillion, respectively, of derivative financial instruments, of which $1.85 trillion and $1.25 trillion, respectively, were listed futures and option contracts...
The second method would be a failure at Bear Stearns that triggers a cascade of failures in the Credit Default Swaps (CDS) market.
http://jessescrossroadscafe.blogspot.com/
First, as of Nov 30, 2007 Bear Stearns was counterparty to 13 TRILLION in derviatives contracts, as shown in their most recent public 10K Filing with the SEC. (hat tip to jerrbear from PrudentBear for tracking down the reference page. Great catch!).
As of November 30, 2007 and 2006, the Company had notional/contract amounts of approximately $13.40 trillion and $8.74 trillion, respectively, of derivative financial instruments, of which $1.85 trillion and $1.25 trillion, respectively, were listed futures and option contracts...
The second method would be a failure at Bear Stearns that triggers a cascade of failures in the Credit Default Swaps (CDS) market.
http://jessescrossroadscafe.blogspot.com/
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