Where did this money go ? All those CDS bets that were lost by the banks, someone was on the winning side of them. This is the most mysterious financial bust that I have ever heard of.
It goes into the hands of fortunate investors who if Japan is anything to go by in past busts then invest elsewhere
A mixed army of life insurers, pension funds, and housewives with margin trading accounts, as well as foreign hedge funds, borrowed at near zero rates during the credit bubble to chase higher yields across the world, pushing up asset prices from Australia to South Africa, Brazil and Britain.
This yen carry trade – estimated at $1.4 trillion in all its forms – has now reversed violently as flight from global markets leads to yen repatriation. This has forced up the currency by almost 40pc against the euro and sterling since August, and by almost 50pc against the Australian dollar
Those playing the carry trade with high leverage have been caught in a brutal squeeze as margin calls force investors to liquidate assets. This in turn has pushed the yen even higher, setting off a vicious circle. The yen has fallen back this week as US rate cuts and swap agreements with emerging market economies help restore a degree of global confidence, but few in Japan are yet convinced the coast is clear.
Market Data 
Markets 
AI
