Re: hedging: good or bad?

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 10:20 AM 4/18/95, Bruce McFarling wrote:

>        I'm skeptical whether focusing on hedging itself is going to give
>sufficient answer.  For example, in currency hedging, as was discussed on
>pkt recently, is the question whether or not hedging is good or bad?  Or
>is it, rather, whether a system is good or bad that encourage currency
>speculation and increases the importance of hedging as an auxilliary to
>international trade?  The second is a longer question, but I'd venture a
>short answer: no, such a system is not good.

If hedging convinces powerful players - big banks and industrial companies
- that volatility more or less doesn't matter, then there's reduced
political pressure for a more stable system.

But thanks to "selective hedging," people can speculate by doing nothing!

Doug

--

Doug Henwood
[dhenwood@xxxxxxxxx]
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax