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



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