And then where's all the risk pool up in the system this time? In the forex market, that's where.

What are the principles in the articles is that danger cannot be disappeared. It can only be transferred or temporarily hidden from view. 

This runs counter from modern portfolio management, which maintains that all risk can be hedged with counter party issued securities such as options, future contracts, derivatives and so on.

In that respect are several problems with all the notion that risk can always be neutralized with counterpart security and central bank liquidity. The inaugural is the more fundamental. Risk is a feature of all markets. As a consequence of their fractal nature, risk cannot be eliminated. Who claims that the risk is eliminated will fall catastrophically.

In other words precisely, what happened in 2008/09, when all the low risk trades blew up and nearly  took all the global financial system down. " Why nobody sees the crisis is coming? "--Greenspan.

Conventional models assume the market will stay liquid during crisis. But in the real world, when panic hold, seller-bid completely disappear and market freeze up. Assets that cannot be sold are rendered worthless. 

Risk, which has supposedly disappeared, erupts and what is supposed to be permanent, liquidity disappears.  It's all well and good to hedge a position with a counterparts issued securities, but if the counterparty can't pay off the hedge when things go south, the hedge disappears and the hedge must be swallowed whole. 

All that's solid melts into air.

Risk by its very nature, flows to where it is least expected-- into the parts into the system that is perceived is safe. Thus risk in 2002 to 2007 flow into home mortgages. The parts the financial system that was widely regarded as safe and low risk.

And then where's all the systemic risk now? In the last meltdown all the central banks (not Malaysian) are focused on protecting mortgage market, too large to fail and jail, institutions and sovereign bonds as those were the sectors where the risks erupted last time. But risk cannot be disappeared, it can be only transferred or temporarily cloaked.

Then where has all the risk, pooled up in the system? IN THE FOREIGN EXCHANGE.

Not so fast but slick. So the strengthening of dollars will still bite all these emerging markets borrowers with very sharp teeth. Printing Yen and Euros are not a direct substitute to the dollars that have ceased flowing. 

The risk of unleashed by central bank support of massive carry trades, devaluation, currency crisis has yet to manifest. When they do, that's when the volcano will be stomping on the stocks and bonds market without even noticing the squishing sound.

In effect, the failure to address the structural problems revealed in the last Global Financial Meltdown of 2008/09 has been transferred to the larger foreign exchange market-FX, which is connected to virtually everything in the global economy. 

While we can always buy back into a trending market, we cannot go back in time to recover a profit lost to greed and complacency

Invest wisely and cautiously. 

P/s: The good laugh, will Malaysian central bank unleash it's tiny quantitative easing? Maybe the policy makers are still dreaming or too busy at something else.