The news has been sparse. The deficit just gets worse and worse. A new hedge fund worry cropped up. News was sparse. The Prudential spokesman would not call me back, but when confronted, did confirm these quotes were true.
Nobody really knows how bad the derivative problem is.
But it is bad enough for Fed Chairman Alan Greenspan to uncharacteristically push down interest rates in an accelerated manner and it is bad enough for Prudential to put these disclaimers on their official statements. This is rather shocking news and if this news circulates and more serious derivative problems surface, Prudential could have a run. Well, you tell me. It now says in their statements that they can pledge client securities to support a derivative bailout. I bet only a small percentage of investors at Prudential even realize that Prudential can do this.