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I’ve been out of this space for a long time now, but I’m pretty sure that notional CDS volume is way lower now than it was in ‘08. During the subprime crises the notional volume on credit default swaps dwarfed the size of the underlying bonds - so many were used for pure speculation rather than hedging. There have been several regulatory changes since then too which I think has helped. Data is hard to come by unfortunately since these are private contracts - there is some data available but it by no means covers the true size of the market.
As for AI, I definitely agree there will be a crash at some point. It’s just hard to imagine that there will be returns commensurate with the massive amount of investment that is flooding into this space right now.
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1957 Speedster, 1965 356SC, 1965 356SC Outlaw, 1972 911T, 1998 993 C2S, 2018 Targa 4 GTS, 2014 Cayenne S, 2016 Boxster Spyder, 2019 Tacoma
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