Description: Merrill Lynch & Co. units now owned by Bank of America Corp. won dismissal of claims in a lawsuit filed by MBIA Inc. last year over protection sold against mortgage-debt defaults. Source: Bloomberg.com Date: 04/10/2010 Link: http://www.bloomberg.com/apps/news?pid=20601208&sid=ac_igSnXiHDw Questions for discussion: What is the significance of the judge’s decision in this case? What are the… Read more »
Posts Tagged: Derivatives
A futures exchange for Hollywood
Description: Armchair investors may soon be able to bet real money on how films perform at the box office. Source: CNNMoney.com – video report  Date: 04/02/2010 Link: http://money.cnn.com/video/news/2010/04/02/n_hollywood_futures.cnnmoney/ Questions for discussion: How is this market similar to a conventional futures market such as one for gold? What risk is at play for investors? How… Read more »
SEC explains dangerous derivatives
Description: Director of the SEC’s division of Risk, Strategy, and Financial Innovation Henry Hu maps out how credit default swaps work. Source: CNNMoney.com – video report  Date: 03/05/2010 Link: http://money.cnn.com/video/markets/2010/03/04/mkts_ss_sec_white_board.cnnmoney/ Questions for discussion: Summarize the financial arrangements between banks, companies, and investors that define credit default swaps.  What is the problem, if any? Should… Read more »
A.I.G. Posts Loss of $11 Billion on Higher Claims
Description: The American International Group said on Friday that it lost about $11 billion last year, surprising analysts and showing the long-term risks inherent in the types of large, complex insurance coverage that the company once pioneered. Source: NYTimes.com Date: 02/26/2010 Link:Â http://www.nytimes.com/2010/02/27/business/27insure.html?ref=business Questions for discussion: What is your view of this business model in… Read more »
Euro tarnished, but rivals lack shine
Description:Â Â The euro is damaged goods, laid low by a debt crisis that has revealed the shortcomings of European economic and monetary union, economists say. Source: Marketwatch.com Date: 02/26/2010 Link: http://www.marketwatch.com/story/euro-tarnished-but-rivals-dont-shine-2010-02-26?siteid=nwtwk Questions for discussion: How would you expect hedge fund managers to play the current situation? How should corporate financial planners dealing with exports or… Read more »
Decline in U.S. Stocks Pays Options Traders 75% Profit on VIX
Description: The biggest sell-off in the Standard & Poor’s 500 Index since March is rewarding options traders who bet on a surge in volatility with gains of 75 percent. Source: Bloomberg.com Date: 01/23/2010 Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aZOPq7yDKhng Questions for discussion: What sort of risk is involved with these instruments? Who would be interested in them? Do you… Read more »
‘Abusive Swaps’ Would Be Banned Under Frank’s Derivatives Plan
Description: Legislation tightening oversight of the $592 trillion over-the-counter derivatives market would give regulators authority to ban so-called abusive swaps. Source: Bloomberg.com Date: 10/03/2009 Keys: Stock market (p281), Derivatives (p664) Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=amik0fY5tT7c Questions for discussion: Do you agree with the effort to regulate the derivatives market. Explain your answer. Do you think the financial crisis… Read more »
