Not all hedges are created equal

One of the key lessons risk managers should take from the global financial crisis is that apparently sound hedges may not do the job in all conditions, argues David Rowe


It is often said that the four most dangerous words in the English language are: “This time is different.” Having begun a career as a would-be economic forecaster on September 1, 1973, I learned this lesson early. At the time, forecasting had a good track record, encouraging some practitioners to boldly proclaim the end of boom-and-bust business cycles, but – six weeks after I entered the profession – the first successful Arab oil embargo ushered in what was then the worst recession since the

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