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Investors wan't leverage. Always. When you plug one leak, they will scramble and innovate until they find another way to get it. Buying on margin, options, C
by JackFr 7y ago
Investors wan't leverage. Always. When you plug one leak, they will scramble and innovate until they find another way to get it. Buying on margin, options, CDS, structured products... the list goes on.
- piker 7y agoMight be a product of the generous bankruptcy system in the US. I.e., investors are rational in their willingness to take big risks because of the asymmetric payoff associated with highly-leveraged investing. It's a great system, but not without negative unintended consequences such as this kind of moral hazard.