>Almost all of the toxic assets, or more properly, speculative loss that will never be paid, was on the derivatives market which could be as much as $1.2 quadrillion dollars, 20 times the size of the entire world economy, of which even the $16 trillion in bailouts was a small amount.
This is quite literally unbelievable. Do you have anything to back it up?
In theory these unwind cleanly, and the actual risk is low. As the article says, if there is even a small discrepancy in how they unwind, the real numbers are insane. A big part of the freak out when Lehman failed is that everyone knew that in theory the deals would unwind, but it had never been tested in practice on anything like that scale.
I've never read anything I thought was credible from washingtonsblog, and this is no exception. The number is based largely on speculation, and if you follow the chain of blogs and investor articles the whole thing just stinks of the sort of hype you see when an investment site is trying to scare you.
This is quite literally unbelievable. Do you have anything to back it up?