Feb. 2, 2024
The basis behind passing this rule supposedly is to manage risk in periods of heightened volatility. The implementation of the rule in the current form would be counterproductive to that objective. Easing the margin requirements encourages illegal market behavior to continue. And then it will keep continuing until some desperate leveraged institution makes enough terrible bets that “threaten to take down the financial system”, then they need a bail out. Or you could just let the chips fall as they may and let these bad trades unfold. You didn’t let it happen naturally in 08’, so now these are the consequences. Deal with them, don’t prolong it for the next generation to deal with (when it’ll be 1000x worse). Do the right thing for once. I’ll keep commenting until you do. And maybe bring back Glass Steagall to avoid this problem in the future? TB