Myths and legends of the market
The JC’s guide to the foundational mythology of the markets.™
Emissions Allowance
“Wanna stop frying the planet? Start here. Will it help? Who knows? The forward curve is in contango: who cares!”
| Docs |
Take your pick: IETA, ISDA or even EFET: none of them good. But at least you have flexibility in mediocrity |
4
|
| Amendability |
Nope. The EU can amend them, but you can’t. |
0
|
| Collateral |
They aren’t anyone’s obligations as such. In fact, they’re more like a sort of unofficial, made up, (hush) crypto. No credit risk! |
DNA
|
| Transferability |
With an account at the Union Registry, sure! |
7
|
| Leverage |
Not unless you do a CEmO, and we just made that up. |
0
|
| Fright-o-meter |
Not directly scary as long as there is an EU with Greta Thundberg in it, but global warming is going to lead to Armageddon so, you know, indirectly. |
5
|
Index: Click ᐅ to expand:
|
|
Collateralised Emissions Obligation, an apocryphal transaction type that did not, but had it existed, surely would have, precipitated a global financial crisis, as carbon traders, hopped-up on absurd amounts of synthetic alpha blew up not just the financial markets but the entgire ecosystem with their leveraged bets on greenhouse gas regulations.
