Matt Levine: uncertainty

Transcript context

…Here’s a question from a reader. I quote, “Are there huge bets being made on Wall Street now that could end in something like the CDO-MBS financial crisis debacle?” Maybe that I don’t know about. My general impression is that the reform of financial regulations since the financial crisis has had a lot of its intended effects. One of those is that systemically important financial institutions, by some reasonable definition, probably aren’t making huge directional bets on things — like huge, levered, directional bets on things that aren’t traditional banking products, anyway. You never know what someone’s getting up to, but I’d be surprised if there are huge, levered, directional bets existing at regulated financial institutions. Do you have a single biggest worry, however tiny, tiny, tiny it may be?…

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