Ferchi

Alan Greenspan famously said in 2003 that "what we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so.” In practice, if you look at the actions of the CIO, derivatives were used to transfer risk from those who should have been taking it — big lenders — to hedge funds who make money only when JP Morgan turns out to have fundamentally miscalculated its risk basis.