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Because if RH were to collapse the clearing house would be left holding the bag. And clearing houses don't have that kind of money. So DTCC (the main clearing h
by karmicthreat 6y ago
Because if RH were to collapse the clearing house would be left holding the bag. And clearing houses don't have that kind of money. So DTCC (the main clearing house) going under would stop pretty much all trading in the US.
So the clearing house requires 100% collateral for some stocks now instead of up to 5%. RH can't afford that and GME has been eating up 50% of RH daily trades.
- HenryKissinger 6y ago> So DTCC (the main clearing house) going under would stop pretty much all trading in the US. What would be the impact of that on the global financial markets? On the real economy? I think we're going to see some difficult regulations on retail investors in the not too far future.
- karmicthreat 6y agoRealistically? Nobody is going to let DTCC go under, ever. But they don't want to be the one begging for a government bailout either.
- JMTQp8lwXL 6y agoSounds like clearing houses need more insurance themselves.