Good article on ETF risks

gizmo_rat · Post by **gizmo_rat** » Sat May 05, 2012 9:58 am

This article is good summary of the risks involved in various classes of ETFs. The author develops the idea that EFTs have the potential to be the new CDOs of financial armageddon.

http://www.golemxiv.co.uk/2012/05/etfs-part-2/

Best quotes for me

"They [ETFs] are awash in leverage and riding on a tide of derivatives which hide so much concentration of counterparty risk that it makes a mockery of ‘risk management’."

"...while the Europeans are indeed going to shoot themselves in the head with derivatives the Americans are going to garrote themselves with ‘Securities Lending’."