Collapsing Collateral, Derivatives, And Systemic Risks
By Chris at www.CapitalistExploits.at
Last week I published the first part of a conversation I had recorded with Daniel Want, the CIO at Prerequisite Capital Management. Today I have the second part of our conversation for you. In it Daniel and I dug into:
- The collapse in collateral in the system.
- How derivatives pose systemic risk as high quality collateral is diminishing in the global economy and derivative exposure relative to this collateral has risen, creating counterparts risks.
- Why and how trust is the basis for the development of high quality collateral and how this and all the other metrics Daniel measures are pointing down.
- Daniel’s model for an investment portfolio that is both resilient AND efficient.
- How Daniel focuses on analyzing multi-year trends in asset classes.
I invite you to listen to the second part here:
(Click on the image to listen to the podcast)
“Derivatives are like sex. It’s not who we’re sleeping with, it’s who they’re sleeping with that’s the problem.” ? Warren Buffett
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