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Why are Markets still Falling?
The Tsunami caused by Derivatives and Deleveraging

London, UK - 16th October 2008, 09:35 GMT

Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

The invisible elephant in the room causing continuous falls in global financial markets is the link to the privately traded Credit Default Swaps (CDS) and the financial uncertainty they have created whilst synchronised deleveraging takes place across the world. Many CDS contracts have been triggered at their exorbitant notional or face value by a number of bankruptcies and nationalisations and as a result many counterparties are unable to meet their payment obligations which are becoming due week-in week-out in their hundreds of billions of dollars. Much of what is driving the panic in the financial markets is that so little is known about who owes what to whom because of the lack of transparency and no central clearing house for privately traded unregulated derivatives.

[CONTINUES] [ATCA Membership]

[ENDS]

We welcome your thoughts, observations and views. Thank you.

Best wishes


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