The dog that is not barking in financial markets
Brad DeLong makes a good point in highlighting one positive sign from the Amaranth collapse: Amaranth blows up following a trading strategy that either had no method at all to it or was a failed attempt to corner next spring’s natural gas market. Yet there is not a sign of disturbance to the markets. Amaranth’s ...
Brad DeLong makes a good point in highlighting one positive sign from the Amaranth collapse: Amaranth blows up following a trading strategy that either had no method at all to it or was a failed attempt to corner next spring's natural gas market. Yet there is not a sign of disturbance to the markets. Amaranth's investors have lost what is now said to be $6 billion. Some other people have the $6 billion--if they can, in turn, unwind their positions. But the system cruises on with no worries about liquidity or solvency and no changes in risk premiums. Reassuring, I think.
Brad DeLong makes a good point in highlighting one positive sign from the Amaranth collapse:
Amaranth blows up following a trading strategy that either had no method at all to it or was a failed attempt to corner next spring’s natural gas market. Yet there is not a sign of disturbance to the markets. Amaranth’s investors have lost what is now said to be $6 billion. Some other people have the $6 billion–if they can, in turn, unwind their positions. But the system cruises on with no worries about liquidity or solvency and no changes in risk premiums. Reassuring, I think.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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