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BlackRocks's Fink Says Leveraged ETFs May 'Blow Up' Industry
Amusing demagoguing to deflect the problem he has - BlackRock is #1 in line to be classified as SIFI of all the financial institutions. "I am not the ugliest, look at them...".
If BlackRock breaks a buck as the largest cash management provider, not only will the industry blow up but every one the world over is going to feel the blast and get burnt. It will be far, far worse than any flash crash or market volatility.
He is conflating individual investors " blowing up" their portfolios using leveraged funds ignorantly to the financial system blowing up using another false equivalence, investors don't understand leveraged ETFs and the financial industry didn't understand CDOs.
Root cause with 2008 was that mortgage securitization and CDOs allowed the opaque transfer of risk so that people who were making decisions to deploy cash in increasingly riskier investments weren't the ones who carried the risk.
To be credible, he has to make the case as to what will cause such a scenario than resort to this fear mongering demagoguery.
I am far more concerned with Life Settlement securitization I wrote about in a recent thread in blowing up the financial industry because it has the same opaque transfer of risk to people away from those that make the decisions for taking on risk. But this doesn't demagogue as well as the word leverage.
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If BlackRock breaks a buck as the largest cash management provider, not only will the industry blow up but every one the world over is going to feel the blast and get burnt. It will be far, far worse than any flash crash or market volatility.
He is conflating individual investors " blowing up" their portfolios using leveraged funds ignorantly to the financial system blowing up using another false equivalence, investors don't understand leveraged ETFs and the financial industry didn't understand CDOs.
Root cause with 2008 was that mortgage securitization and CDOs allowed the opaque transfer of risk so that people who were making decisions to deploy cash in increasingly riskier investments weren't the ones who carried the risk.
To be credible, he has to make the case as to what will cause such a scenario than resort to this fear mongering demagoguery.
I am far more concerned with Life Settlement securitization I wrote about in a recent thread in blowing up the financial industry because it has the same opaque transfer of risk to people away from those that make the decisions for taking on risk. But this doesn't demagogue as well as the word leverage.