If only we knew where Münchau’s 100bn of losses where

Sir Wolfgang Münchau does a great job reducing a 62.000bn market size of Credit Default Swaps down to “possible losses [that] might be below 100bn.” “Defaults will test a fair-weather construction” September 22.

Though I believe he is entirely right in his assumptions, the journey there is fraught with dangers that could attempt against reaching such a favourable outcome, like “offsetting claims in the other direction” is not easy when so many counter-parties are immersed in confusions of their own, and no one seems capable to answer…Where are those damn 100bn?