Post #4095089
2026-07-25 10:47 UTC
This devaluation can also occur when your house's value plummets because Elon Musk repeatedly bombs your neighborhood with flaming rocket debris, or when your Tesla's resale value collapses after Musk throws a string of Seig Heils on national television.
The point being that risk mitigation is never risk *elimination*, but markets have a hard time distinguishing between the two. Partly that's because of risk *shifting*.
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Replies (1)
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@pluralistic@mamot.fr 2026-07-25 10:47
A lender who can "securitize" their loans (turn them into bonds and sell them off to investors) can insulate themselves from risk, because the people who buy the bonds are now carrying that risk. So many of our crises come from the intersection of these two phenomena: the promise of reducing loan risks without losing the risk premium *and* the fact that risk reduction can fail suddenly (or be revealed as nothing more than risk-shifting). 16/