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Here’s What $1.2 Quadrillion Looks Like – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

The global derivatives market is big. Really big. So big – and so unregulated – in fact that no one really knows exactly how big it is, but the very best estimates put the notional value at $1.2 quadrillion dollars. That handily beats the entire world’s “GDP” of $71.8 trillion. The number is so big that it really defies anything on a human scale. Humans don’t do quadrillions of anything – at least not usually.

Or think of it this way: There are about 2 quadrillion stars in the “El Gordo” cluster, the largest cluster of galaxies we’ve observed so far. The derivatives market is galactic in scope.

Or, consider that there are about 1 quadrillion ants living on Earth. If you put all the ants and all the people into two big piles, they’d be about the same size. $1.2 quadrillion buys every ant on Earth a ride on a crosstown bus.

As fun as these things are to think about, this $1.2 quadrillion matter is not to be taken lightly. The derivatives market is largely unregulated. In fact, it’s so unregulated that the U.S. Congress, on the advice of investment banks, made it largely illegal to regulate derivatives.

The risk in this market is overwhelmingly concentrated in the United States, and it’s getting worse. In 2011, a mere four banks held 95.9% of U.S. derivatives. Talk about a bull’s-eye.


Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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