big businesses that own the mainstream media ... have likely banned Krugman from mentioning ugly issues ... $500Trillion in Credit Swaps

OpEdNews � Mr. Obama, Fire Geithner & Hire Krugman NOW!
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But there is still an “elephant in the room” that Krugman is neither writing nor speaking about. However, it was obliquely alluded to in his interview with Amy Goodman on Democracy Now! yesterday.

At one point Amy asked (likely by pre-agreement): “And this issue of counterparties, a word we’re just learning right now, that AIG gets all of these billions of dollars, and they use some of it to pass through to banks once—well, to entities like Goldman Sachs, to UBS, which had to pay a massive fine to the US government, so we’re paying their fine for violating us?”

I won’t reproduce Paul’s answer here, but rather I want to emphasize that the word counterparty, which Amy is apparently just learning, is a terminology used in the discussion of Credit Default Swaps (CDS). And I want to make the point that Krugman has never mentioned CDS in any of his columns ...OR the notional amount of the “fines” that A.I.G. and the big banks REALLY want us taxpayers to pay them for their having “violated us.”

So why didn’t Amy call the “elephant in the room” by its real name: CDS?

Well, once before I’ve argued that the big businesses that own the mainstream media in general, and the NY Times in particular, have likely banned Krugman from ever mentioning such ugly issues as the existence of evidence for widespread election fraud or the existence and significance of CDS, so long as he remains on their payroll.

... “The market cap of GM is only about $11B. However, based on estimates in the CDS market, there are about $1 trillion in CDSs betting on GM and their bonds. Any change in GM's situation, will create a rippling effect in this $1T CDS community of GM.”

“There are obviously not $1T of GM properties to act as collateral, so you have to trust all parties involved in this wild casino betting that they won't go under water. As a matter of fact, you better pray, because if one goes under, which is a high probability event, it throws a monkey wrench in the whole community, as everyone is trying to rewind and get out at the same time. It becomes a ‘no way out situation’”.

So Tan explains how trading of CDS with the idea of grabbing quick profits can have spun up the notional values of these CDS many times larger than their values when first issued.

Now the initial value of all freshly issued CDS is well enough known to be about $45 trillion, whereas in consequence to their having been extensively traded they are estimated to have ballooned to a notional value of as much as $500 trillion! Putting this into perspective, the U.S. GDP – and the U.S. money supply – is “only” about $15 trillion, the GDPs of all nations in the world sum to approximately $50 trillion, and the total value of world's stock and bond markets is “only” slightly more than $100 trillion. ...