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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (11859)9/26/2008 2:47:36 PM
From: benwood3 Recommendations  Read Replies (1) | Respond to of 71454
 
Seems like the real risk of counterparty failure is hedging strategies. e.g. take a position with one party, and hedge the risk with another party.

If the position goes south, you get a loss. So you rub your hands with glee that you took out some insurance. But the counterparty contract (with somebody else) fails.

Given enough leverage, ka-blam, you are insolvent.

Is this what you've been talking about?



To: Real Man who wrote (11859)9/26/2008 3:31:25 PM
From: dybdahl  Read Replies (1) | Respond to of 71454
 
It keeps growing as long as the sustainable level is higher than the current level. This doesn't imply that it's a spiral out of control, and it doesn't imply that it is unhealthy.


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