Fortunately the world is full of brave pundits prepared to put money on the line by telling us that emerging markets are a one way bet. Just as we’d be foolish not to have a small percentage of our investments in such markets, we’d be equally so to be betting the farm on them. These are the counterarguments: do with them what you will.
Even a country as cautious, sound, and generous as Basicland could come to ruin if it failed to address the dangers that can be caused by the ordinary accidents of life. Basicland is now under new management, using a new governmental system. It also has a new nickname: Sorrowland.
Would you buy a round-trip ticket on an airplane prone to crashes? How about a car with a history of serious brake problems? Interested in a TV that works great, except for the picture? If you answered yes to any of those, Citi has an investment opportunity for you. The bank is readying a new credit derivative, the CLX, which is basically a systemic risk insurance that will pay out in the event of a financial crisis. The basic premise is to allow investors to hedge against a spike in funding costs.
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