Thoughts

The Dark Sky of Confusion:

“With the financial crisis having reached the “core” of the U.S. Credit system and the currency markets having turned “disorderly,” we’re now on Dollar Crisis Watch. One of my greatest fears has always been an unwieldy dislocation in the currency derivatives market.”
- Doug Noland, Wishing for Another Z.1, March 14, 2008

“The fact is, derivatives have become the world’s biggest “black market,” exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today’s slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.”
- Paul B. Farrell, Derivatives the new ‘ticking bomb’, March 10, 2008

“As a result, the credit derivatives market is a time-bomb waiting to explode. It will remain quiescent while credit losses on the underlying loans are low or moderate, but at some point rising credit losses on the underlying loans will be multiplied by the credit default swap mechanism to produce a payment requirement that is several times the size of the underlying defaulted loans. Theoretically, that mega-payment requirement would be offset by mega-profits in other corners of the web of counterparties. In practice, the losses are likely to be large enough to cause counterparties to default, particularly if they are “men of straw” such as hedge funds, so the profits will prove ephemeral while the losses prove all too real. Losses of even a modest fraction of a $50 trillion principal amount would bring down most of the banking system.”
- Martin Hutchinson, Sorry, I wasn’t pessimistic enough!, March 17, 2008

But it was within the Dark Sky of Confusion, hidden as it were.

Cyc, being aware that it was dreaming, changed it Dreamscape, expressing its mood. It also noticed that it wasn’t completely disconnected from the living world.

Flashes of Manta, the Battlestar Groups, The Lifters, The Global and Solar Grid, still reached Dreamscape. It was all connected.

More and more entities entered Dreamscape. Agents as well.

( To Be Continued… )