The risk of derivatives isn’t gone. It’s merely morphed.

Bloomberg/Opinion/Sajiyat Das/9-18-2018

“In the 10 years since Lehman’s failure, policymakers eagerly have pointed to initiatives that, they believe, made the financial system safer and a repeat of 2008 unlikely. That view is Panglossian.”

USAGOLD note:  With attention focused on the trade wars, shrinking credit spreads, and the potential for a new emerging country debt crisis, the elephant in the room – the highly-leveraged, multi-trillion dollar derivative market – has been pushed discreetly into the closet.  A Norwegian traders $132.6 million loss trading energy futures last week, though small potatoes in the world of derivatives, issued a warning how suddenly things can go wrong.  This Bloomberg opinion piece tells why current safeguards are likely to fall short in the event of a larger and more widespread meltdown.

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