Buy This Guaranteed Loss!


By Karl Denninger

This sort of thing is infuriating:

June 24 (Bloomberg) — Royal Bank of Scotland Group Plc, JPMorgan Chase & Co. and Barclays Plc are charging fees on some structured notes that equal or exceed the securities’ highest possible yield, as sales of the opaque products draw scrutiny from regulators.

Got that?

The “in english” explanation of the above paragraph is that if you buy these products you are guaranteed a loss.

Now it’s entirely plausible for someone to create a product that guarantees you a loss. 

What’s infuriating is that there are no people sitting in jail for marketing such products to you without a clear duty to disclose that it is impossible for you to make a profit if you buy them.

Of course if they clearly disclosed that fact they might not sell very many of them, would they?

The Market-Ticker