The Black Hole!

It can be fun to gamble.  But at least have the decency to gamble with your own money...  Or the Casino's own money (that is, comps)!

Thanks to the lack of global regulation on the financial market our entire planet has been waged against paper wealth. 

What is the total outstanding set of wagers?  According to this article 1 quadrillion is on the line. That is 190K for every person on the planet!

Now as the article notes, and people who are responsibly reporting this issue, this is merely the notional value which can be much less than the actual value. But still... if this is reduced to a small percent of the total risk it still seems crazy.

The virtue of the article just quoted is that is spells out how certain possible scenarios would result in a global economic explosion that would make the current crisis, apparently based merely on bad loans, look like a walk through the rose garden.

Here is the author's conclusion:

In the context of the USD 700 billion rescue plan -- still being finalised in Washington, DC -- the following is worth considering step by step. Decision makers are rightly concerned about alleviating immediate pressure points in the global financial system, such as, the mortgage crisis, decline in consumer spending and the looming loss of confidence in financial institutions. However, whilst these problems are grave, they are acting as a catalyst to another more massive challenge which may have to be tackled across many nation states simultaneously. As money flows slow down sharply, confidence levels would decline across the globe, and trust would be broken asymmetrically, ie, the time taken to repair it would be much longer. Unless there is government action in concert, this could ignite a chain-reaction which would swiftly purge trillions and trillions of dollars in over-leveraged risky bets. Within the context of over-leverage, the biggest problem of all is to do with "Derivatives", of which CDSs are a minor subset. Warren Buffett has said the derivatives neutron bomb has the potential to destroy the entire world economy, and is a "disaster waiting to happen." He has also referred to derivatives as Weapons of Mass Destruction (WMD). Counting one dollar per second, it would take 32 million years to count to one Quadrillion. The numbers we are dealing with are absolutely astronomical and from the realms of super computing we have stepped into global economics. There is a sense of no sustainability and lack of longevity in the "Invisible One Quadrillion Dollar Equation" of the derivatives market especially with attendant Black Swan variables causing multiple implosions amongst financial institutions and counterparties! The only way out, albeit painful, is via discretionary case-by-case government intervention on an unprecedented scale. Securing the savings and assets of ordinary citizens ought to be the number one concern in directing such policy.