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The problem is AIG has underwritten $440 BILLION in Credit Default Swaps against mortgage-backed securities.
Worse problem: According to the Bank of International Settlements, the maniacs in the world financial industry have underwritten about $1 QUADRILLION in various kinds of derivatives. If the global economy were to stay stable, a quadrillion dollars is TWENTY YEARS WORTH OF THE GROSS PRODUCT OF THE ENTIRE WORLD!
A quadrillion dollars. That's a one with fifteen zeroes behind it. If you were able to print a quadrillion dollars worth of $100 bills, you could encase the entire Earth in a jacket of money two feet thick.
Compared to $440 billion AIG made up out of thin air, or a quadrillion the world's derivatives community made up the same way, $165 million in obligations is cab fare.
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