Saturday, December 4, 2010

Banks and derivatives exposure: Nothing has changed! (Video)

In fact it may be worse! Risk to the banking system from derivatives is the same or in some instances greater, than it was before the financial crisis began.

Back on November 24th I wrote an article titled "Is there a ticking time bomb in the banking system?" I had predicated my analysis on the price action of the major money center banks versus the price action of the overall market. My theory went along the lines of exposure to the housing market and potential future foreclosures.

Reggie Middleton of BoomBustBlog.com uses derivatives exposure as his rationale for potential storm clouds ahead. He was right before about the risks to the system. Will he be right again? Here is his assessment in a CNBC interview. The full article can be found here.













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