It’s a scary phrase, but when credit default swaps have a nominal value in excess of the GDP of the world, it’s true in a sense. The level of fraud, waste, and abuse is at a level that exceeds all the money in the world.

Scare quote courtesy of Chris Floyd:

Try to imagine that: a $55 trillion market now at risk of complete destruction. Even the derivative debt owed by individual institutions stands at nation-wrecking levels. For example, a single bank in Britain, Barclays again, holds more than $2.4 trillion in credit default swaps, the tradable “insurance” mechanism against securities default. This is more than the entire GDP of Great Britain. If all this paper goes bad, there are not enough assets in the entire country to pay it off. And that’s just one bank, in one country.

Well, isn’t that special.