Sounds more like your “source” doesn’t understand how derivatives work.
Lets just put it this way...We’re all OK if Peter Bernstein is right about risk.....we’re done for if Denninger is...and who knows if Taleb is?!!!LOL
My personal concern is that America and American banks have historically been granted great latitude and powers by virtue of the US Constitution which ensured conduct under law rather than whim-especially relative to the rest of the world.
Denninger’s argument is that this is no longer so...if which case the cardhouse we’ve been allowed to build has a flawed foundation upon which the integrity of risk management principles Bernstein discusses is based.