Notional

Derivatives are a sick joke. Even though their notional value exaggerates how much money is actually tied up in them, I think that might be the point. People see numbers like 'one and a quarter quadrillion dollars' tossed around in relation to derivatives and they think, "How in the world do we unwind *that*??'

Derivatives are like sticks of dynamite tied around the waist of a hostage taker- they might be fake, they might not actually blow the whole building up, but they do keep you guessing.

Personally, I think they could be and should be unraveled and wound down. A team of computer programmers and accountants could vaporize them right out of the system if all the counterparties took arbitrated payoffs and walked away.

But I think they like waving the dynamite around better.