Tuesday, January 05, 2010

YRC and the Street's Appetite for Destruction

In the battle between the truckers and the hedge funds, the truckers won. The fact that YRC Worldwide almost went bust because of credit-default swaps shows how little has changed on Wall Street.

The struggle for survival at YRC, trucking company best known for its Yellow and Roadway-branded big rigs, attracted scant media attention in the waning days of 2009.

YRC did survive, but only after the last-minute intervention of the Teamsters union, which threatened to protest at the office of one Park Avenue hedge fund.

The fight revolved around credit-default swaps, the Wall Street invention that allows investors to profit when a company goes bust. Made famous for bringing down American International Group, credit-default swaps act like insurance policies on debt, and may make a company worth more dead than alive, at least to some investors. Complete Story....

1 comment:

treywhiteiii said...

we cant read the complete story unless we subscribe to WSJ. Not cool.