by Karl Denninger
Forever there has been an immutable half-joke in the markets: There is very strong support at zero.
Yesterday the CME violated that by allowing oil futures to trade with a negative price.
This, of course, came after we allowed central banks to print “negative” interest rates — that is, to literally destroy money they were given to hold.
This was a catastrophic error on the part of the CME and may prove to be fatal to financial markets and our nation generally. If you cannot set a maximum point of risk then all financial transactions must be re-computed as having infinite — that is, unbounded risk.
Down this road lies literal beheadings and other forms of ugly, including mass random murders and assassinations. Once you remove the capacity to price risk because there is no limit to it irrespective of the decisions one makes, that is, someone will retrospectively change the rules, then there is no reason for anyone to believe that voting or any other form of civility is warranted in any respect.