Macro Report: The Contagion Effect: Volatility’s Hidden Path Through the Economy
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Macro Report: The Contagion Effect: Volatility’s Hidden Path Through the Economy
You can think of leverage more abstractly as an induced vulnerability to shocks — “exogenous” or otherwise — in exchange for a magnified gain in their absence.
Sacha Meyers • Bitcoin Is Venice: Essays on the Past and Future of Capitalism
To summarize, the problem with artificially suppressed volatility is not just that the system tends to become extremely fragile; it is that, at the same time, it exhibits no visible risks.