According to the CIA Fact Book, the world economy was $54.62 (at official exchange rates) in 2007.
You’ve probably heard that the amount of credit default swaps (CDS) is greater than the world economy. This is confirmed by the Bank for International Settlements – the official organization which tracks derivatives – there were $57.9 trillion dollars worth of CDS as of December 2007 (Table 19).
But did you know that the amount of unallocated derivatives as of December 2007 was an additional $71.2 trillion dollars (Table 19)?
I’m not sure if anyone except the financial players themselves know what these unallocated derivatives are. But one thing is for sure: CDS and the unallocated derivatives have to be canceled or valued at a penny each, and regulated quickly.