- Hedge fund actions don’t amplify market volatility.
- Vulnerabilities in market-based finance remain.
- A trade shift could harm stability by depressing growth.
- Banks can support the economy, even if conditions deteriorate.
- Risks linked to trade fragmentation have intensified.
- Risks of further corrections remains high.
Anyone who traded or followed markets long enough, would laugh to this line “hedge fund actions don’t amplify market volatility”. They do amplify volatility and there are countless examples with the most famous one relating to LTCM downfall in the 90s.
This article was written by Giuseppe Dellamotta at www.forexlive.com.