Tuesday, March 29, 2005

Mega Corporations Over-Reliant On Hedging

Barry Ritholtz writes for the subscription site RealMoney.com, but todays article is out on Reuters. Mr. Ritholtz is advising his clients to sell on the up bounces and he has a pertinent observation on the hedging.

"I am becoming increasingly concerned about the macro impact of derivatives. From Fannie Mae to AIG to GE to Bershire Hathaway, all too many U.S. companies have turned into heavily camouflaged, leveraged hedge funds. Skipping over the esoteric details, I suspect this too, will end badly."


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