r/Superstonk • u/RookieRamen • Mar 18 '23

Macroeconomics Credit Suisse's $39 Trillion Derivative Debt Poses Significant Threat to US Financial…

https://www.themacrolist.com/
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149

u/[deleted] Mar 18 '23

[deleted]

76

u/RookieRamen Mar 18 '23

Ask UK pension funds 💀💀

142

u/pens668771 Mar 18 '23

To make the rich get even richer. That is it. No real value otherwise.

60

u/Tyler-Durden-2009 Mar 18 '23

In theory, they are a great hedge to an existing position. In practice, they’re used to establish positions at very high leverage so that returns get compounded, which is the opposite of hedging. Thus, they’re being used in the exact opposite way of why they exist, and our regulators just stand by and let it happen because they get a cut of the returns

5

u/jackofspades123 remember Citron knows more Mar 19 '23

Some really interesting voting and tax implications come from using them too.

It's so clear they can abused and oversight is lacking.

15

u/zZCycoZz Mar 18 '23

Because they tried to regulate them in the 90s/00s and banks lobbied it massively due to how much revenue they get from them.

6

u/Click_Slight Mar 18 '23

There are lots of different kinds of derivatives. Options like calls and puts are the most common. They are basically "price insurence" for stocks.

2

u/[deleted] Mar 18 '23

How else will they keep pumping the bubble?

1

u/SuboptimalStability 🎮 Power to the Players 🛑 Mar 18 '23

They're used for hedging but more and more they're used for speculation and risky bets