Earlier quoted context omitted.
> I do think there will be a crash similar to 2008, but this is not evidence that it is coming. i agree but i lack a specific metric or analysis that supports my thinking. do you have one?
I think that there are significant incentives for financial institutions to create financial products (derivatives, etc.) that contain (and magnify) the systemic risk that is part of their inputs. Systemic risk is very costly to hedge against, and to do so requires keeping capital idle that could otherwise be productive. Also, esoteric financial instruments are always going to be less liquid than simple securities, y…
fascinating, thanks for this post.