Monday, January 21, 2008

Danger of systemic breakdown

Doug Noland looks at the world of financial speculation, which has used loads of borrowed money to boost returns, and worries that as liquidity dries up, the market will become inefficient. This is, I think, one of the things about which Richard Bookstaber has warned. Perhaps the gunslinger day traders should assure themselves of the robustness of their counterparties when playing with futures and options.

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