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"Variable Leveraged Super Senior Certificates" Spell Trouble For Investors
Derivative investments are popular, but should investors purchase them?
In less than a month, a Triple A rated security, issued by Foraois Funding Limited, was downgraded to junk. Why? Moody's cited "the rapid deterioration of the current market value of the reference portfolio."
What did the portfolio hold? Good question! Moody's states that it was "comprised of a variety of structured finance securities", and, apparently, because these securities were "super senior" they would not be exposed to early losses from the underlying securities. But losses mounted nonetheless.
Be careful!
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Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
of general interest. It is neither intended to, nor constitutes, either legal advice or investment advice.
Always consult an attorney and/or investment advisor when building and protecting your wealth.
All content Copyright © 2008 Advocate Capital Management, Inc. except where noted. All rights reserved.
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