THE COUNTRY’S IN THE VERY BEST OF HANDS: “You have been saving dutifully for your teenager’s education and, with college just a couple of years away, you have chosen what you think is a safe bond investment. Imagine your shock when, on opening your statement, you learn that your conservative, state-sponsored fund lost 38 percent of its value last year. If you’re astute enough to dig deeper, you learn the fund was using derivatives to increase its exposure to mortgage-backed securities. Yes, even as the housing market was tanking, someone thought it was a good idea to make a risky, leveraged bet on mortgage bonds. And they did it with your kid’s college fund.”
Well, happily, not my kid’s.