People joke, but high debt in the market is underdiscussed or ignored and my biggest worry.
Many suddenly learned in 2008 a lot about what subprime, CDO, CDS, MBS, ARM, & NRSOs were.
In addition to well tracked margin trading, how many today know what: (big breath)
leveraged ETFs, Non-Purpose Loans (HELOC, SBLOC, ABLOCs...), clearinghouses (OCC, CME), cash value life insurance, NBFI, Repo, CFD, CLO, CFO, CDP, ABS, 0DTE & SRTs are?
Or how 90% of leveraged ETF buyers, 1/2 of margin traders, 1/4 of options & and the cypto market are dumb money?
Not just dumb but idiot gambling money. All skyrocketing only over the last 10yrs due to regulation & fee changes and no friction investing.
Hundreds of big scams have already been exposed over the last decade when the market was booming. The easy ones to spot. Usually it takes a crash to expose a Bernie Madoff.
How many Madoffs are out there today?
How many AIGs?
How many New Century Financials?
How many Bear Sterns & Lehman Bros?
That we won't know until the crash?
‘In addition to its capital, the firm employed a risky strategy which involved borrowing money from its broker in order to purchase even more shares, in some cases amplifying its bets by 300 or 400%’
Love when commentators orientalize hedge funds margin trading.