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  "path": "/2026/02/i-saw-this-in-2008.html",
  "publishedAt": "2026-02-28T01:09:00.006Z",
  "site": "https://40yrs.blogspot.com",
  "tags": [
    "investors are setting up complex financial instruments to protect themselves from the collapse of AI companies",
    "link"
  ],
  "textContent": "It looks like investors are setting up complex financial instruments to protect themselves from the collapse of AI companies. (Archive.is link)\n\nThis sounds like the (ultimately ineffective) attempts in the 2006-2008 time frame to use similar instruments.\n\n> Investors are riding out the “whack-a-mole” software sell-off by loading up on protection against volatility and exploiting the divergence in sectors tipped to be either winners or losers from AI’s advance.\n>\n> Some of Wall Street’s biggest players are turning to complex options and hedging strategies to navigate a market buffeted by blog posts and headlines that have recently wiped tens of billions of dollars off the value of some of the S&P 500’s largest tech groups.\n\nYes, adding complexity to an unstable market always work out **SO** well.\n\n> ………\n>\n> Investors are embracing so-called dispersion trades, which involve buying single-stock volatility while selling index volatility to profit from the gap between the S&P 500’s relatively subdued daily moves and large price swings for individual companies.\n>\n> ………\n>\n> Dispersion trades could come unstuck if markets suffer a broader setback — perhaps sparked by geopolitical risks or an escalation of trade wars — that causes stocks to fall in unison.\n>\n> In that situation, investors who have bet on dispersion might be forced to buy index-level volatility protection, potentially exacerbating a market-wide sell-off, according to Jasmine Yeo, a fund manager at Ruffer.\n\nGee, isn't that how CDOs and the like led to the panic in 2008?\n\nWe are f%$#ed/",
  "title": "I Saw This in 2008",
  "updatedAt": "2026-02-28T07:08:05.101Z"
}