Saturday, December 10, 2011

Shadow Rehypothecation, Infinte Leverage, And Why Breaking The Tyrrany Of Ignorance Is The Only Solution
"Liquidity requires symmetric information, which is easiest to achieve when everyone is ignorant. This determines the design of many securities, including the design of debt and securitization. "Reread the last statement as it explains perhaps better than anything, the true functioning of modern capital markets and why they are terminally broken: in order to preserve the system, the banking cartel need to make everything of virtually infinite complexity so that no one has a clear understanding of what is going on!

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