Excellent background blog on how the numbers work, from the headlines down into the nitty-gritty of real life.
I think it's important to be able to refer people to this kind of investigative background reporting, because otherwise it's just another one of those 'you have your opinion and I have mine' things.
Bottom line, most people are well aware that we're still in a jobs crisis, but there are still some who like to parrot the 'party line' in defiance of the obvious. It's important to have documented evidence to put into their hands ... not that they ever open their minds to the point of seriously looking at it.
I track corporate media mostly through NPR news, which I can listen to in the background ... except when it turns into such blatantly corporate propaganda that I have to turn it off. Today, while maintaining their usual cheery spin on economic news, NPR News did fulfill their obligation to mention -- and even briefly explain -- the matter of people dropping out of the officially counted labor force.
Roughly 3 million LPR came during 20o7-2009. The real number of people needing a job is about 25-30 million, taking the outliner data points, including those stuck in part time who need full time jobs, those not counted at all.
That's simply not enough to justify blaming LPR for the unemployment problem. I'm sorry, yes immigration is clearly negatively impacting native (U.S. citizen) workers, but it sure isn't the real story.
I will go through some of these numbers as soon as I can, but if you want credibility, you need to be accurate in your ratios.
Also, regular population is not the group from where the workforce originates, unless you want to believe in slave, child, mental asylum and prison labor.
The foreign born civilian labor force just dropped 96k for the past year. For the past year, their non-institutional civilian population increased 455,000. That's 38,000 per month, not 150k.
This is anyone who wasn't born in the U.S., be they brought over as infants to the U.S. or recently border hopped illegally or came over on guest worker Visas.
Finally, please put comments in their corresponding post. This belongs under unemployment rate.
People drop out of the job market for various reasons. Some are forced out.
I am asking for an accounting of the drop in the participation rate.
Squeeze out is many things as well. Remember the argument about how technology
replaces jobs? That is another factor claimed. We know that the net replacement
of jobs due to technology changes should be small if the technology is domestically created.
"The natural population growth is in the range of 250K per month, leaving a squeeze out rate of 150K for those unfortunate enough to have been born in the U.S.A.:
until I hit the link, hmmm, now it's nuts to claim of the monthly civilian nonstitutional pop increases that's all immigrants, and so on, I clearly need to do some posts on the "foreign born" stats.
From your last presentation on the ADP jobs report at best there were 200K (inflated estimated) jobs created last month reported. The average ADP creation rate was probably 100K per month over the last year. The natural population growth is in the range of 250K per month, leaving a squeeze out rate of 150K for those
unfortunate enough to have been born in the U.S.A.
DHS has a ballpark estimate of what legal immigration levels were accepted in the last 3 years. There was a bar room discussion before 2008 about what would happen to immigration levels if a second great depression ever happened. We have some of the answers. How does the labor participation rate look like now? It went down somewhat in the last month due to the drop out rate being 3/4s of the change in nominal unemployment.
Table 3.
Year LPR Status Obtained for the Legal Permanent Resident
Population: 2010
Year
All legal permanent
residents
Legal permanent residents
eligible to naturalize
Number Percent Number Percent
Total . . . . . 12,630,000 100.0 8,070,000 100.0
Before 1960 . . . . 180,000 1.4 180,000 2.2
1960–1969 . . . . 420,000 3.3 420,000 5.2
1970–1979 . . . .1,040,000 8.2 1,040,000 12.9
1980–1989 . . . .1,110,000 8.8 1,110,000 13.7
1990–1999 . . . .2,770,000 21.9 2,650,000 32.9
2000–2004 . . .. 2,290,000 18.1 2,010,000 25.0
2005–2006 . . . 1,860,000 14. 8 660,000 8.2
2007–2009 . . . .2,980,000 23.6 — —
Source: http://www.dhs.gov/xlibrary/assets/statistics/publications/ois_lpr_pe_20...
This is legal immigration. Note the levels before 1960 and the levels after 1960.
1965 is the year of the change in immigration law.
Thanks for the response and also for the zero hedge link below.
If I am understanding "swaps" correctly, this will basically help Euro banks (and consequently Wall St banks who have exposure to them) with any short term liquidity crisis, but does nothing for long term solvency since "swaps" need to be traded back at some point?
Long story, but while these graphs are all my configurations, set up to match economic reports or show some value I'm interested in, they are actually hosted elsewhere. I have permission to set it up this way but if their server crashes because the graphs are hosted on their site, they will disappear for a minute. They almost never crash, can handle the traffic so this is a weird one. Seriously crashed, which I cannot do much about at the moment, but marking it in the "admin" book here.
Anytime you see "waiting on" on a site that means a server has crashed, many sites now days use multiple servers for content.
It's seriously crashed, I hope they aren't being dDoSed, these guys are economics geeks, not exactly Ben & Co.
It appears that the preconditions set out by Chancellor Merkel are being met, presumably clearing the way for the ECB to issue eurobonds in order to amortize Italian debt over a number of years going forward.
Mario Draghi, president of the European Central Bank, has signalled that the ECB is ready [to] act more aggressively to fight the eurozone debt crisis.
He told the European Parliament that at a summit next week eurozone leaders could restore confidence by agreeing [to] stronger deficit and debt rules.
Such a fiscal union would be "the most important element" in a chain of events, he said. "Sequencing matters."
Well, you know, EP readers are pretty spoiled. We are used to excellent posts here.
If you register, you can vote up or down at the top of any blog, and I voted for this blog. But often, there's nothing that I don't understand or I just don't have anything to add. But that doesn't equate to a vote of disapproval at all.
It would be interesting if more people registers and voted on blogs here at EP.
WASHINGTON — The Federal Reserve moved Wednesday with other major central banks to buttress financial markets by increasing the availability of dollars outside the United States, reflecting growing concern about the fallout of the European debt crisis. ....
The European Central Bank borrowed $552 million ... during the week ending Nov. 23 to meet the liquidity needs of European banks. Data for the past week is not yet available.
Under the new terms of the program, the existing interest rate premium of 0.1 percentage points on those loans will be reduced by half, to 0.05 percentage points, effective Dec. 5.
Then, in technical jargon, from the Fed's press release --
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points.
I'm voting for this blog, but something's going awry with graphs, here and maybe elsewhere at InstaPopulist articles. I am not seeing what I should be seeing. FireFox is giving me this message: "Waiting for research.stlouisfed.org"
I agree, we need more discussion and a good first step would be for you to register.
I'm surprised too. While this isn't an original article, watching both of these videos drives home how most are truly desperate and America has turned into a financial casino for most.
only 1 comment on this post and yet this is the real deal... all the other posts about the value of the euro etc, etc... don't mean diddly
this post and that piece of reporting, bravely done by 60 minutes IMO, display the result of a catastrophically failed political/economics system and yet only 1 comment...?
I have failed to provide context in my presentation of recent commentary at Jesse's Café Américain, by insufficient attention to the word and concept of 'targeting'.
Jesse suggests that the Fed may be trending toward making a fundamental change in the models that it uses to analyze data and decide policy. Jesse's focus is on proposed Fed targeting of NGDP goals. Such targeting would abandon or de-emphasize the current more-or-less statutory targeting of (1) employment (including reduction in unemployment) and (2) inflation -- in favor of targeting growth measured as NGDP.
This is the approach of Scott Sumner (UK professor of economics), presented by Sumner in WSJ video interview, posted by Jesse as background on Sumner's approach. See, this WSJ webpage. Also see, Wikipedia article on Scott Sumner.
Jesse's criticism of proposed Fed policy of NGDP targeting --
'Nominal GDP targeting' is a way of raising the Fed's inflation target without admitting to it explicitly.
Nominal GDP means that one can meet their growth target simply by inflating the money supply to make up the difference between 'real growth' and 'headline growth.' Some parties are raising NGDP as the next policy initiative from the Federal Reserve.
BTW: It's interesting that Sumner points mainly to mismanagement (or worse?) of regulatory functions as the core of USA economic problems. He points out that whereas the US has suffered three major financial collapses over the past century, Canada has suffered none of these. He suggests that the US could learn from the better regulatory structure and practices of Canada.
Such is the schizophrenic nature of the world economic system that US Bank credit ratings are falling while the Dow is on a holiday tear. The system looks good on the outside, but it's hiding a cancer: http://djia.tv/press-tv/top-us-banks-credit-ratings-fall/
I have failed to provide context in my presentation of recent commentary at Jesse's Café Américain, by omitting a major contextual component in Jesse's analysis of the recent action by the Fed (and related tri-lateral or 'Anglo-American' central banks) to shore up the Euro crisis by injecting Eurodollars.
I omitted Jesse's discussion on SDRs in context of the "currency wars" theories popularized by James Rickards (author of "Currency Wars: The Making of the Next Global Crisis"). See, Wikipedia article Currency_war. Jesse also discusses the current phase in this era of 'Currency Wars', namely the 'Third Gold War'. (Café Américain, 5 May 2010)
The "Currency Wars" buzz has, of course, threaded its way in and out of discussion here at EP, mostly back in 2010. Notably, using the EP search engine, there's a link to a guest post on ZeroHedge (Tyler Durden) by Maurizio D'Orlando of AsiaNews.it, "Currency Wars And The Fed's Demise" (20 November 2010) that relates the grand currency wars meme to our little lives here in USA as affected by Fed actions. See,
Jesse's long-term analysis relates to the emerging IMF Special Drawing Rights (SDRs) 'currency', presently based on a basket of national currencies. The fundamental questions, especially long-term, are (1) whether the SDR basket could or should include not only major currencies but also PM, and, (2) whether the US $ and the British £ are over-represented in the currency basket.
The dominant global currency regime 'could' come in the form of the SDR for global trade if the composition of the SDR continues to contain a significant dollar-pound component. Yes, the IMF has the ability to 'print' SDRs, but the SDR is a currency for use between nations, and its value is linked to a basket of individual domestic currencies. Hence, it cannot be printed limitlessly, but must be linked to the value of something else, some external standard.
.... Even the 'reformed' basis for the SDR is ludicrous, with its over-representation of the dollar and the pound. And now proceeds the dismantling and pacification of the eurozone. And the hysterical antagonism by the Western bankers against the inclusion of gold and silver in the SDR basket as proposed by the BRICs.
Café Américain, 29 November 2011
Now that the SDR is off the table as a broadly acceptable replacement for the dollar reserve currency regime, at least for the next five years, we might expect more regionalization of trade and the formation of new trading blocs. This implies less financial stability as the developing and commodity nations begin to rebel against the current foundations of global finance that continue to subject them to the monetary policies of the Big Four: US, Europe, UK and Japan.
Note: Jesse's Café Américain doesn't purport to be an information source like EconomicPopulist.org, however, I find the commentary there helpful in understanding what's going on, especially when both Europe and the USA are involved. Graphs and valid information sources are cited, but Jesse's Café Américain is primarily to present one person's opinion.
From the blog page --
"These are personal observations about the economy and the markets. .... My comments are intended to be reflection on general macro financial and economic events and trends."
We've seen this before, sitcoms using the show as a soapbox for some liibberraal position of the day. I cannot think of how many shows have gone on and on about the "poor undocumented" as if it's a political story plant. Never a criminal among them, despite the statistics. ;)
But I just had the tube on and this is not subtle. It's almost like they took direct quotes from the blogs, the OWS people, general public and wrote them into "closing arguments" for the show.
I thought I was listening to someone read from this site as I was making dinner, haphazardly watching. Seriously, it's almost a direct lift.
So, I decided to embed their episode (besides, Kathy Bates can seriously act, that helps) for the story seems to be making everything media....but cable pundits and Congress/White House.
I cannot tell you how many times I've watched some idiot get busted for robbing a bank with a gun or other types of robberies, where no one was hurt and they are going to prison for a very long time over it...
and I think to myself every time, only stupid people get arrested. No one with half a brain would commit a crime like that. It's not even very much money. The real money is 100% in white collar, "digital" "cyber" crime or legalized crime, such as banks giving out loans as described in the episode.
So, it seems like being stupid is also a criminal act in America....except of course if you are a bank customer. ;)
Not at all. Derivatives are not assets, not real economic resources. Derivatives, to make it crude, are surplus value. Like nukes in the thousands they are there to 'make the rubble bounce'. Derivatives outvalue all the collective wealth of the world many times over. Like nukes they only are here to destroy.
It is easy to think that the banksters get rich on these things. But really they destroy banks Derivatives are asymmetric hedges because the underlying assets types are dissimilar and markets different. This way, GS lost money this quarter.
From ZeroHedge. This is how derivatives are surplus value.
Now, consider this: the top four US banks (JPM Chase, Citibank, Bank of America and Goldman Sachs) control nearly 95% of the US derivatives market, which has grown by 20% since last year to $235 trillion. That figure is a third of all global derivatives of $707 trillion (up from $601 trillion in December, 2010 and $583 trillion mid-year 2010. )
Breaking that down: JPM Chase holds 11% of the world’s derivative exposure, Citibank, Bank of America, and Goldman comprise about 7% each. But, Goldman has something the others don’t – a lot fewer assets beneath its derivatives stockpile. It has 537 times as many (from 440 times last year) derivatives as assets. Think of a 537 story skyscraper on a one story see-saw. Goldman has $88 billon in assets, and $48 trillion in notional derivatives exposure. This is by FAR the highest ratio of derivatives to assets of any so-called bank backed by a government. The next highest ratio belongs to Citibank with $1.2 trillion in assets and $56 trillion in derivative exposure, or 46 to 1. JPM Chase's ratio is 44 to 1. Bank of America’s ratio is 36 to 1.
Excellent background blog on how the numbers work, from the headlines down into the nitty-gritty of real life.
I think it's important to be able to refer people to this kind of investigative background reporting, because otherwise it's just another one of those 'you have your opinion and I have mine' things.
Bottom line, most people are well aware that we're still in a jobs crisis, but there are still some who like to parrot the 'party line' in defiance of the obvious. It's important to have documented evidence to put into their hands ... not that they ever open their minds to the point of seriously looking at it.
I track corporate media mostly through NPR news, which I can listen to in the background ... except when it turns into such blatantly corporate propaganda that I have to turn it off. Today, while maintaining their usual cheery spin on economic news, NPR News did fulfill their obligation to mention -- and even briefly explain -- the matter of people dropping out of the officially counted labor force.
Roughly 3 million LPR came during 20o7-2009. The real number of people needing a job is about 25-30 million, taking the outliner data points, including those stuck in part time who need full time jobs, those not counted at all.
That's simply not enough to justify blaming LPR for the unemployment problem. I'm sorry, yes immigration is clearly negatively impacting native (U.S. citizen) workers, but it sure isn't the real story.
I will go through some of these numbers as soon as I can, but if you want credibility, you need to be accurate in your ratios.
Also, regular population is not the group from where the workforce originates, unless you want to believe in slave, child, mental asylum and prison labor.
The foreign born civilian labor force just dropped 96k for the past year. For the past year, their non-institutional civilian population increased 455,000. That's 38,000 per month, not 150k.
This is anyone who wasn't born in the U.S., be they brought over as infants to the U.S. or recently border hopped illegally or came over on guest worker Visas.
Finally, please put comments in their corresponding post. This belongs under unemployment rate.
People drop out of the job market for various reasons. Some are forced out.
I am asking for an accounting of the drop in the participation rate.
Squeeze out is many things as well. Remember the argument about how technology
replaces jobs? That is another factor claimed. We know that the net replacement
of jobs due to technology changes should be small if the technology is domestically created.
"The natural population growth is in the range of 250K per month, leaving a squeeze out rate of 150K for those unfortunate enough to have been born in the U.S.A.:
until I hit the link, hmmm, now it's nuts to claim of the monthly civilian nonstitutional pop increases that's all immigrants, and so on, I clearly need to do some posts on the "foreign born" stats.
From your last presentation on the ADP jobs report at best there were 200K (inflated estimated) jobs created last month reported. The average ADP creation rate was probably 100K per month over the last year. The natural population growth is in the range of 250K per month, leaving a squeeze out rate of 150K for those
unfortunate enough to have been born in the U.S.A.
DHS has a ballpark estimate of what legal immigration levels were accepted in the last 3 years. There was a bar room discussion before 2008 about what would happen to immigration levels if a second great depression ever happened. We have some of the answers. How does the labor participation rate look like now? It went down somewhat in the last month due to the drop out rate being 3/4s of the change in nominal unemployment.
Table 3.
Year LPR Status Obtained for the Legal Permanent Resident
Population: 2010
Year
All legal permanent
residents
Legal permanent residents
eligible to naturalize
Number Percent Number Percent
Total . . . . . 12,630,000 100.0 8,070,000 100.0
Before 1960 . . . . 180,000 1.4 180,000 2.2
1960–1969 . . . . 420,000 3.3 420,000 5.2
1970–1979 . . . .1,040,000 8.2 1,040,000 12.9
1980–1989 . . . .1,110,000 8.8 1,110,000 13.7
1990–1999 . . . .2,770,000 21.9 2,650,000 32.9
2000–2004 . . .. 2,290,000 18.1 2,010,000 25.0
2005–2006 . . . 1,860,000 14. 8 660,000 8.2
2007–2009 . . . .2,980,000 23.6 — —
Source:
http://www.dhs.gov/xlibrary/assets/statistics/publications/ois_lpr_pe_20...
This is legal immigration. Note the levels before 1960 and the levels after 1960.
1965 is the year of the change in immigration law.
in bold, why this is so incredible to the markets we don't know. i.e. swaps and such help bail out the banks but don't solve the problems at all.
Thanks for the response and also for the zero hedge link below.
If I am understanding "swaps" correctly, this will basically help Euro banks (and consequently Wall St banks who have exposure to them) with any short term liquidity crisis, but does nothing for long term solvency since "swaps" need to be traded back at some point?
Here is the Krug Man's take on it:
http://krugman.blogs.nytimes.com/2011/11/30/what-the-central-banks-did-t...
He is "mystified" by the market reaction.
That's the huge problem, Germany is carrying many.
Long story, but while these graphs are all my configurations, set up to match economic reports or show some value I'm interested in, they are actually hosted elsewhere. I have permission to set it up this way but if their server crashes because the graphs are hosted on their site, they will disappear for a minute. They almost never crash, can handle the traffic so this is a weird one. Seriously crashed, which I cannot do much about at the moment, but marking it in the "admin" book here.
Anytime you see "waiting on" on a site that means a server has crashed, many sites now days use multiple servers for content.
It's seriously crashed, I hope they aren't being dDoSed, these guys are economics geeks, not exactly Ben & Co.
It appears that the preconditions set out by Chancellor Merkel are being met, presumably clearing the way for the ECB to issue eurobonds in order to amortize Italian debt over a number of years going forward.
From BBC News story (1 December 2011), ECB's Drachi hints at robust action to help eurozone
Well, you know, EP readers are pretty spoiled. We are used to excellent posts here.
If you register, you can vote up or down at the top of any blog, and I voted for this blog. But often, there's nothing that I don't understand or I just don't have anything to add. But that doesn't equate to a vote of disapproval at all.
It would be interesting if more people registers and voted on blogs here at EP.
Here are two ways of saying the same thing.
First, in plain English --
Excerpted from NYT article by Binyamin Appelbaum (30 November 2011), Central Banks Take Joint Action to Ease Debt Crisis --
Then, in technical jargon, from the Fed's press release --
I'm voting for this blog, but something's going awry with graphs, here and maybe elsewhere at InstaPopulist articles. I am not seeing what I should be seeing. FireFox is giving me this message: "Waiting for research.stlouisfed.org"
I agree, we need more discussion and a good first step would be for you to register.
I'm surprised too. While this isn't an original article, watching both of these videos drives home how most are truly desperate and America has turned into a financial casino for most.
only 1 comment on this post and yet this is the real deal... all the other posts about the value of the euro etc, etc... don't mean diddly
this post and that piece of reporting, bravely done by 60 minutes IMO, display the result of a catastrophically failed political/economics system and yet only 1 comment...?
come on ppl
I have failed to provide context in my presentation of recent commentary at Jesse's Café Américain, by insufficient attention to the word and concept of 'targeting'.
Jesse suggests that the Fed may be trending toward making a fundamental change in the models that it uses to analyze data and decide policy. Jesse's focus is on proposed Fed targeting of NGDP goals. Such targeting would abandon or de-emphasize the current more-or-less statutory targeting of (1) employment (including reduction in unemployment) and (2) inflation -- in favor of targeting growth measured as NGDP.
This is the approach of Scott Sumner (UK professor of economics), presented by Sumner in WSJ video interview, posted by Jesse as background on Sumner's approach. See, this WSJ webpage. Also see, Wikipedia article on Scott Sumner.
PDFs and webpages of Sumner's work are available from the UK libertarian think-tank, Adam Smith Institute, at their website, www.adamsmith.org. In particular, summary and free download of PDF (11 April 2011) titled The case for NGDP targeting - lessons from the Great Recession is available at this webpage.
Jesse's criticism of proposed Fed policy of NGDP targeting --
BTW: It's interesting that Sumner points mainly to mismanagement (or worse?) of regulatory functions as the core of USA economic problems. He points out that whereas the US has suffered three major financial collapses over the past century, Canada has suffered none of these. He suggests that the US could learn from the better regulatory structure and practices of Canada.
Such is the schizophrenic nature of the world economic system that US Bank credit ratings are falling while the Dow is on a holiday tear. The system looks good on the outside, but it's hiding a cancer: http://djia.tv/press-tv/top-us-banks-credit-ratings-fall/
I have failed to provide context in my presentation of recent commentary at Jesse's Café Américain, by omitting a major contextual component in Jesse's analysis of the recent action by the Fed (and related tri-lateral or 'Anglo-American' central banks) to shore up the Euro crisis by injecting Eurodollars.
I omitted Jesse's discussion on SDRs in context of the "currency wars" theories popularized by James Rickards (author of "Currency Wars: The Making of the Next Global Crisis"). See, Wikipedia article Currency_war. Jesse also discusses the current phase in this era of 'Currency Wars', namely the 'Third Gold War'. (Café Américain, 5 May 2010)
The "Currency Wars" buzz has, of course, threaded its way in and out of discussion here at EP, mostly back in 2010. Notably, using the EP search engine, there's a link to a guest post on ZeroHedge (Tyler Durden) by Maurizio D'Orlando of AsiaNews.it, "Currency Wars And The Fed's Demise" (20 November 2010) that relates the grand currency wars meme to our little lives here in USA as affected by Fed actions. See,
188.126.66.66/article/guest-post-currency-wars-and-fed%E2%80%99s-demise
Jesse's long-term analysis relates to the emerging IMF Special Drawing Rights (SDRs) 'currency', presently based on a basket of national currencies. The fundamental questions, especially long-term, are (1) whether the SDR basket could or should include not only major currencies but also PM, and, (2) whether the US $ and the British £ are over-represented in the currency basket.
Note: Jesse's Café Américain doesn't purport to be an information source like EconomicPopulist.org, however, I find the commentary there helpful in understanding what's going on, especially when both Europe and the USA are involved. Graphs and valid information sources are cited, but Jesse's Café Américain is primarily to present one person's opinion.
From the blog page --
We've seen this before, sitcoms using the show as a soapbox for some liibberraal position of the day. I cannot think of how many shows have gone on and on about the "poor undocumented" as if it's a political story plant. Never a criminal among them, despite the statistics. ;)
But I just had the tube on and this is not subtle. It's almost like they took direct quotes from the blogs, the OWS people, general public and wrote them into "closing arguments" for the show.
I thought I was listening to someone read from this site as I was making dinner, haphazardly watching. Seriously, it's almost a direct lift.
So, I decided to embed their episode (besides, Kathy Bates can seriously act, that helps) for the story seems to be making everything media....but cable pundits and Congress/White House.
I cannot tell you how many times I've watched some idiot get busted for robbing a bank with a gun or other types of robberies, where no one was hurt and they are going to prison for a very long time over it...
and I think to myself every time, only stupid people get arrested. No one with half a brain would commit a crime like that. It's not even very much money. The real money is 100% in white collar, "digital" "cyber" crime or legalized crime, such as banks giving out loans as described in the episode.
So, it seems like being stupid is also a criminal act in America....except of course if you are a bank customer. ;)
Not at all. Derivatives are not assets, not real economic resources. Derivatives, to make it crude, are surplus value. Like nukes in the thousands they are there to 'make the rubble bounce'. Derivatives outvalue all the collective wealth of the world many times over. Like nukes they only are here to destroy.
It is easy to think that the banksters get rich on these things. But really they destroy banks Derivatives are asymmetric hedges because the underlying assets types are dissimilar and markets different. This way, GS lost money this quarter.
From ZeroHedge. This is how derivatives are surplus value.
Now, consider this: the top four US banks (JPM Chase, Citibank, Bank of America and Goldman Sachs) control nearly 95% of the US derivatives market, which has grown by 20% since last year to $235 trillion. That figure is a third of all global derivatives of $707 trillion (up from $601 trillion in December, 2010 and $583 trillion mid-year 2010. )
Breaking that down: JPM Chase holds 11% of the world’s derivative exposure, Citibank, Bank of America, and Goldman comprise about 7% each. But, Goldman has something the others don’t – a lot fewer assets beneath its derivatives stockpile. It has 537 times as many (from 440 times last year) derivatives as assets. Think of a 537 story skyscraper on a one story see-saw. Goldman has $88 billon in assets, and $48 trillion in notional derivatives exposure. This is by FAR the highest ratio of derivatives to assets of any so-called bank backed by a government. The next highest ratio belongs to Citibank with $1.2 trillion in assets and $56 trillion in derivative exposure, or 46 to 1. JPM Chase's ratio is 44 to 1. Bank of America’s ratio is 36 to 1.
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