Overvalued Derivatives at Merrill signals sign of trouble in financial engineering sector
Sam Adelton
May 24, 2008

The stock market is now ready to go down sharply because of across the board failure of financial engineering.

The preliminary review department at Merrill Lynch & Co., determined that one desk used marks that appear to be outside of their corporate accepted policy. They have suspended a trader and we continue to review this matter.

Merrill is downplaying the matter. However, the matter is much more serious. Declines on European and U.S. markets this year have exposed a growing list of errant traders, tarnishing firms including Credit Suisse Group and Societe Generale SA.

Equity derivatives can be linked to a stock, exchange- traded fund or equity index, and are used to bet on underlying share prices or hedge against losses. Single-stock-flow traders focus on specific companies. Overvalued Derivatives at Merrill signals sign of trouble in financial engineering sector.

Overvalued Derivatives at Merrill signals sign of trouble in financial engineering sector
Sam Adelton
Merrill is downplaying the matter. However, the matter is much more serious. Declines on European and U.S. markets this year have exposed a growing list of errant traders...
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