Menachem Ben Yakov

Playing the Market as Delinquencies Continue to Rise

Those who fail to discern that not all derivative contracts are created equal are investing with their eyes closed. In fact a short position is also a derivative contract. Interest rate swaps and derivatives based upon AAA rated municipal bonds for instance have risen in value across the broad market. When opinions regarding derivative exposure are offered without detail the reader should beware. Those that suggest a bank is " over exposed " to derivatives ( such as HSBC, which I own ) based simply upon the cumulative value of outstanding contracts have failed to do their homework.