I believe that there was a "bubble" in the oil market - although Jerome prefers to call it "large volatility" - and that there will inevitably be one again the next time a wave of speculative money swills into the oil market.

The Reuters story is in respect of the way that traders are increasingly reluctant to deal with each other without a "risk intermediary" -aka a "Clearing House" acting as guarantor of the performance of the transaction.

So what is happening is that transactions which were "bilateral" or "over the counter" are now increasingly being guaranteed by clearing houses, as Reuters reports.

The conventional regulatory wisdom is that this is a "good thing".

I am not so sure, and regard it aa double-edged sword. I think that it concentrates risk into "single points of failure" which are only too prone to those "once in 10,000 year" events termed "Black Swans".

So that the next time there is a Bubble - and I believe that these are a feature, not a bug, of the system - the market is systemically very exposed.

So, in a nutshell, I see the report as confirming a potentially dangerous growing concentration of risk.

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky

sorry chris.

keep to the Fen Causeway