When considering derivatives banks are still leveraged 50:1 in the U.S.
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Oh well still room to N-tuple down for AMERICA
first, the fed didn’t “spend” 16t, and has in fact turend a huge profit thus far from its various lending schemes. TARP is nearly profitable, I believe, also.
second, remember that all of these figures for derivatives are completely misleading. For example, say that I decide that being 60% long is just too risky for me, so I up and sell some calls on SPY as a hedge. I sell, say, 100 contracts and take in 25k in premium (or whatever).
These articles go to the maximum extent possible in hyperbolizing the situation. Thats a “derivative” (although a publicly traded one) and thats not counted as 25k, its counted as ~100*100*115 = 1.15 million, times 2 because there is a counterparty. So my silly little sale of 100 contracts on SPY is a SHOCKING, STUNNING, 2.3 million dollars of derivatives!
Time bomb waiting to happen! Yet to me its no risk because long positions will rise if SPY rises, my longs rise and i don’t actually go broke or anything, the other guy risked 25k.
See? Soooooooooo much of the bear argumnets over this entire process have been hyperbole to the core.