Staying Away from Credit Default Swaps

Joe Myask from Bloomberg says that Bond Issuers should take time to think over the swaps in the Derivatives market.

He says “Don’t do it at all. Perhaps you haven’t noticed, but there’s a massive investigation going on right now into what the Justice Department has only described as ‘anticompetitive practices’ in the municipal bond market.”

This dear readers is why many careful investors are not investing in such issues. The risks invloved stem not because we don’t know enough about these “financial weapons of mass destruction” to quote Warren Buffett, but because no one does.

“Students of public finance have long suspected that there was going to be a problem with the widespread use of swaps and derivatives by municipalities.”

Bond Issuers Should Take Swaps-Derivatives Time Out
Joe Myask
February 21, 2007
http://www.bloomberg.com/apps/news?pid=20601039&sid=acaQxvztS0sA

Advertisements

Tags:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: