Loading ...“The true sign of a top is when you have these new structures piling up,” said Lawrence McDonald, a chief strategist at Newedge USA LLC, and author of the book “A Colossal Failure of Common Sense” about the 2008 demise of Lehman Brothers Holdings Inc. “At the top of the market in 2007, there were these types of innovation and many investors didn’t realize about it at that time. These products are a clear risk indicator.”
JPMorgan joins Goldman in designing derivatives for a new generation
Submitted by cpowell on 09:01AM ET Tuesday, August 12, 2014. Section: Daily Dispatches
By Sridhar Natarajan and Alastair Marsh
Bloomberg News
Tuesday, August 12, 2014
http://www.bloomberg.com/news/2014-08-12/swaps-reincarnate-boosting-debt…
Derivatives that helped inflate the 2007 credit bubble are being remade for a new generation.
JPMorgan Chase & Co. is offering a swap contract tied to a speculative-grade loan index that makes it easier for investors to wager on the debt.
Goldman Sachs Group Inc. is planning as much as 10 billion euros ($13.4 billion) of structured investments that bundle debt into top-rated securities, while ProShares last week started offering exchange-traded funds backed by credit-default swaps on company debt.