Great post but I must disagree with your final assessment of doom and gloom for years.
You give the solution yourself. These Swaps are worthless. What is going to happen is that all the governments are going to draw a line and say we are writing all of these off and it will be business as usual. This could happen within weeks and be worked through the markets in months.
Lots of banks will not be happy, but who cares. This has been the greatest theft/ swindle in history and those that lived off it should be punished.
What is coming is a new financial system. I just don't know how it is going to work. I think our four pillars are shaky and will be replaced by a stream of competitive boutique banks. Funding for infrastructure and major development will be possibly through central banks run by governments. Very open to your thoughs. I just think the old banking system does not work needs replacing.
