> >Of course, were you to tell me that New York financial institutions'
> >derivative books had a net notional principal that was long the
> >dollar to the tune of $3 trillion, my mind would change. My mind
> >would more than change: I would be reduced to a gibbering, nervous,
> >fearful, insane wreck cowering beneath my desk...
>
> Does anyone know the answer to this question? Better store some food
> & water under your desk, just in case.
Can someone explain what this means? If the "NY financial institutions' derivatives' books had a net notional principal that was long the dollar to the tune of 3 trillion."
If they did, and the dollar fell by, say, 25 %, would that mean their liabilities would rise by 25%? If so, how?
Is there something good online that explains how these derivatives work? Seems complicated to me.
Seth