Among other things, like the US obligations to pay interest as they roll debt over so the deficit goes back to growing instead of shrinking. And like the Fed's balance sheet. I know there are those that think it makes no difference if the Fed is broke or not because they always can print more money. Well monied interests are not as stupid as the general population is made out to be and they know what it leads to. Rats know enough to bail off a burning ship.

Yes, if the big banks trading desks do not have advance knowledge and think the Fed had interest rates under control, there could be an awful lot of interest rate swaps out there that are used to hedge interest rates on long term loans going against said banks. When you get a fixed interest rate loan on a piece of farm land or a house, one of the ways that the lending institution giving out the fixed rate covers themselves against rising rates is with interest rate swaps. The counter party to these swaps or what could be considered interest rate insurance are the banks like JP Morgan, Goldman, etc. If lots of swaps come into paying out, we could have another "too big to fail bank crisis" all over again.

This will be basically the same thing that happened to AIG. They guaranteed a bunch of stuff they did not have the financial strength to back up. Same song, different verse.

John