The deflationary spiral hasn’t been contained to just the equity and real estate markets. For the first time since 1998 OTC derivatives contracts have declined. Notional OTC derivative contracts stood at $592 TRILLION in Q4 of 2008 versus the Q2 ’08 high of $638 TRILLION.
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Declines continued in the CDS market where the volume of outstanding contracts fell 27% to $42 trillion.
*Source: BIS
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.