- A synthetic or uncovered derivative is just a zero-sum game, a gamble in which, in the long run, only the house makes money.
- And "end-user" derivative is a loan in sheep's clothing, priced higher than a loan because it transfers keeps the debt off the balance sheet and insulates the holder from the entanglements of bankruptcy. These extra costs are passed on to the
chumpsunsophisticated or uninformed lenders (tort claimants?) unable for whatever reason to escape the burden.
Sunday, May 09, 2010
Do I Have This Right?
Let me review the bidding: