Let's not forget that the US Gross Domestic Product (GDP) for 2010 was a measured $14.66 trillion. Simplifying what is in fact a very difficult formula, China's figure for comparison was a 'paltry' $5.85 trillion. (In case you're interested, Greece's GDP was $305 billion. The GDP sum total of Portugal, Ireland and Greece (PIG) for 2010 was $740 billion. If you add Spain ($1.4 tn) and Italy (2.1 tn) to that figure it's $4.2 trillion. So what's really got Trichet pressing the 'red panic button'?) Those who know these things will tell you that the size of the world stock market is conservatively estimated at $40 trillion. The size of the global derivatives book is about $800 trillion, give or take...
So when Chairman Benanke announced that US mutual funds / lenders have little or no exposure to Greece and 'neighbours' what he really means is that US banks aren't exposed to derivative instruments linked to those countries. You'll read that European banks have direct exposure in Greece to the tune of $135 billion. Their collective direct exposure in Spain is an exciting $2 trillion.
NOBODY, however, is saying much about the exposure of these institutions to PIGS-linked geared instruments. Watch the share prices of BNP and Socgen for clues....
So when Chairman Benanke announced that US mutual funds / lenders have little or no exposure to Greece and 'neighbours' what he really means is that US banks aren't exposed to derivative instruments linked to those countries. You'll read that European banks have direct exposure in Greece to the tune of $135 billion. Their collective direct exposure in Spain is an exciting $2 trillion.
NOBODY, however, is saying much about the exposure of these institutions to PIGS-linked geared instruments. Watch the share prices of BNP and Socgen for clues....
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