| | | The longer they wait, the bigger the crash. Got to blow the derivatives balloon in order to have a quick fix for the markets. The higher they blow it, the more disconnected it becomes, the worse the crash. There was a warning to stop enabling derivatives in 1987. Didn't take it. A bigger warning in 1998. Didn't take it. Systemic collapse in 2008. Didn't take it.
It will take total and catastrophic system collapse, when "the fix" will be perceived as
"the problem". Can't happen?
Basically, the bubble, now derivatives + HFT + the Federal reserve, grows until it cannot grow anymore. Then it collapses.
Note that I included Federal reserve in the bubble - it is overwhelmingly clear now the Fed is part of the problem, not a solution. They are the sole reason the bubble got as big as it is now. Next time derivative markets have a fit there will be banking holidays and market will be shut down. Adding more nuclear material to financial weapons of mass destruction is not financial disarmament. That is,and always has been, their "fix", and they still try to figure out why the fix blew in their faces in 2008. |
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