Wouldn't you get free leverage if you were to pay for short oil on a USD/EUR considering that the ECB will probably get a pump in money.
Mind you I'm not an expert as yourself. But EU banks have their tentacles on oil as well. What do you think?
Wouldn't you get free leverage if you were to pay for short oil on a USD/EUR considering that the ECB will probably get a pump in money.
Mind you I'm not an expert as yourself. But EU banks have their tentacles on oil as well. What do you think?
I dont understand what you mean by free leverage.
I also dont know the specifics of banking involvement in oil, I have only looked at the macro trends, that is where I like to analyze things. But from my experience, banks are mostly market makers, they hardly take any unnecessary risks, they just like to be middlemen. It's the governments that are the players in the oil markets.
I was implying banks loan management on the oil exposure. But I don't know where I was going with that, too much info around its hard to fully synthesize what is the "right." It was only a speculation that if banks are actively engaged in the administration of loans, and they are getting cheap money then (negative interest, and so forth)the companies receiving the money are getting an artificial leverage.