(Alpha-Zone) Many Americans and lawmakers are worried about the exposure large corporations have to subprime mortgages and mortgage securities. This problem is dwarfed by their exposure to derivatives. The value of these derivatives can be more than the assets of the company.
Over 90 percent of derivatives are traded outside of the regulated exchanges. Most companies keep their holdings off the balance sheet or may include their holdings in the footnotes of their financial statements. As a result, most investors are unaware of the risk. Even if a brokerage firm is not private, it may be difficult to pull the numbers.
