(Intending to the Probable Event with Limited Liability)
High-frequency traders on Wall Street are the Buddhist monks of credit-risk management.
Look at the way HF traders operate. To run in front of the probable event (knowing the event probability because proprietary trading–the realm of the push-out rule–creates it), a profit is realised at the event horizon.
The event is triggered so close to being now (in front of orders in stop-limit mode) that the event occurs in the realm of the event probability. Although this tends to limit the liability associated with rigging the market, the so-called “unexpected trigger” is what calls the risk at the margin–known as a “margin call”–and unwinds the derivatives.
The marginal interest on call, understand, derives from borrowed money. It is a derivative value, managed in derivatives markets, and the credit risk associated with it is regulated by several government agencies like the SEC, CFTC, and even the FDIC.
Maybe 2 in 10 people realize that their credit score is directly related to the margin call. If your income has declined, having been laid off or unemployed and rehired at lower pay (referred to as “good job numbers”), you are more likely to demand credit at a much lower score, which means you pay more for less even though interest rates are really low.
Again, look at the associative property relative to the “credit risk”…. It’s nothing but a racketeering scheme being hustled as “modern economics” (just like providing health care is a way to automatically bust you ASAP and systematically consolidate your net worth–exploiting the weak and infirm, holding you hostage to your health in the name of doing no harm.)
Working you more for less is deflationary…. Whether it’s old, new, modern–it’s still deflationary!
You are not the bad guy for resisting this no-bid system for credit (and health care)!
Let it be the way you want it to be. You are not a taker. You are a maker!
It’s a free market, after all….
Let it be here now.
Make it happen!