What always makes me laugh in a vaguely nervous way is when I hear soundbites/watch videos/read interviews with the Wanksters, where they claim that all their derivative debts “are netted”.

Let me explain something here. Not even Lloyd Blankfein with a direct feed from Jehovah has the faintest bloody clue whether his 103 times leveraged Goldin Sacks is netted with a Chinese takeaway or an Aussie saltwater crocodile.

In the last 24 hours, it has begun to be apparent that several eurozone banks have large exposures to the Detroit collapse, through complex certificates of participation. The startlingly unlovely UBS sold such certificates over a long period – up to a total of around one and a half billion dollars. Most of this sub-sub prime bogpaper ended up with European banks, all of whom of course knew what they were doing. Not.

One particular trail involves Hypo-Real Estate, stranded with $200m of this bollocks via Irish subsidiary Depfa, as well as Dexia. The last of these, says the Wall Street Journal, is the proud owner of ‘essentially worthless paper’. The complex technical structures of this Andrex investment also include an interest rate swap for new improved bamboozlement among all those suckers who bought it.

As most general and specialist US media are now confidently predicting at least another dozen or so Detroits in short order, I’d imagine that almost anything could happen from here on. It would be acidically ironic, would it not, if these cockups led to the collapse of a major in Europe. Then two side-by-side arguments could continue far into the future, about (1) whose fault was it globally – the EU or the US? and (2) whose fault was it in the US – Democrats or Republicans? It wuzz dem pesky Democrat europhiles, honest injun. Or dem Republican isolationist neoliberals, sure was. Well, one of the two anyway.

If one keeps things elegantly simple, they work better. If you deliberately make them complex, they fail the purchaser….but as ever, give the vendor umpteen ways to avoid prison.

Hence the global complication. The madness goes on.

Earlier at The Slog: Why do Governments employ so many crooks?