Esoteric Debt


Esoteric Debt
Complex debt instruments with structures and pricing that are known to relatively few participants. The structure may lead to seemingly attractive risk/return over other debt instruments when the instruments function properly, but can also lead to illiquidity and pricing problems when markets are disrupted. Auction rate securities are an example of an esoteric debt vehicle.

Leading up to the Financial Crisis of 2008-2009, credit was flowing so freely that many companies were creating innovative and imaginative esoteric debt instruments to try to suit investor needs and make money. The result was many odd debt structures that fell apart when credit seized up and few people knew how they should be valued. While these complicated instruments may be more attractive than plain vanilla debt in good times, they can present immense problems when the credit markets tighten.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Alice Bailey — Born Alice LaTrobe Bateman June 16, 1880(1880 06 16) Manchester, England Died December 15, 1949(1949 12 15) (aged 69), New York Alice Ann Bailey (June 16, 1880 – December 15, 1949), known as Alice A. Bailey or AAB to her followers, was an… …   Wikipedia

  • arts, East Asian — Introduction       music and visual and performing arts of China, Korea, and Japan. The literatures of these countries are covered in the articles Chinese literature, Korean literature, and Japanese literature.       Some studies of East Asia… …   Universalium

  • KABBALAH — This entry is arranged according to the following outline: introduction general notes terms used for kabbalah the historical development of the kabbalah the early beginnings of mysticism and esotericism apocalyptic esotericism and merkabah… …   Encyclopedia of Judaism

  • Buddhism — Buddhist, n., adj. Buddhistic, Buddhistical, adj. Buddhistically, adv. /booh diz euhm, bood iz /, n. a religion, originated in India by Buddha (Gautama) and later spreading to China, Burma, Japan, Tibet, and parts of southeast Asia, holding that… …   Universalium

  • performing arts — arts or skills that require public performance, as acting, singing, or dancing. [1945 50] * * * ▪ 2009 Introduction Music Classical.       The last vestiges of the Cold War seemed to thaw for a moment on Feb. 26, 2008, when the unfamiliar strains …   Universalium

  • Judaism — /jooh dee iz euhm, day , deuh /, n. 1. the monotheistic religion of the Jews, having its ethical, ceremonial, and legal foundation in the precepts of the Old Testament and in the teachings and commentaries of the rabbis as found chiefly in the… …   Universalium

  • Ariosophy — Werner von Bülow s World Rune Clock, illustrating the correspondences between List s Armanen runes, the signs of the zodiac and the gods of the months Armanism and Ariosophy are the names of ideological systems of an esoteric nature, pioneered by …   Wikipedia

  • literature — /lit euhr euh cheuhr, choor , li treuh /, n. 1. writings in which expression and form, in connection with ideas of permanent and universal interest, are characteristic or essential features, as poetry, novels, history, biography, and essays. 2.… …   Universalium

  • biblical literature — Introduction       four bodies of written works: the Old Testament writings according to the Hebrew canon; intertestamental works, including the Old Testament Apocrypha; the New Testament writings; and the New Testament Apocrypha.       The Old… …   Universalium

  • Rudolf Steiner and the Theosophical Society — The relationship between Rudolf Steiner and the Theosophical Society founded by H.P. Blavatsky was a complex and changing one. [Christoph Lindenberg, Rudolf Steiner. Eine Biographie. 1861 1914, 1915 1925 , 2 volumes, Freies Geistesleben, 1997,… …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.