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Lehman Brothers has nabbed Muse Kwong, v.p. and structurer at Merrill Lynch in Hong Kong, for a similar role on its Hong Kong desk. Kwong will handle interest rate and foreign exchange structuring and report to Kirk Sweeney, head of Asia ex-Japan fixed income sales at Lehman in Hong Kong. Sweeney did not return calls. Kwong, who is said to start in the coming weeks, could not be reached for comment.

The Federal Reserve Bank of Texas has come out with a robust challenge to Warren Buffett's recent claim that derivatives are weapons of mass destruction, deeming them instead "instruments of financial reconstruction." Thomas Siems, senior economist and policy advisor in Dallas, who co-authored the study into banks use of derivatives, argues free market policies instituted in the 1990s have promoted innovation and effective risk management systems among banks and derivatives have played a vital role within these systems. "Rather than being financial weapons of mass destruction, derivatives instead may be viewed as instruments of financial reconstruction," Siems quipped, rephrasing Buffett's statement in Berkshire Hathaway's annual report last month.

Susquehanna International Group has hired Paul Brownstein, a director in equity derivatives sales at Deutsche Bank in San Francisco, for a similar position. Don Hart, associate director and co-head of equity sales in Bala Cynwyd, Pa., said the hire reflects an effort to build its equity derivatives sales activity.

New York-based hedge fund manager L-R Managers will likely purchase puts and calls in its soon-to-be-launched L-R Global Fund, a global value equity hedge fund. The fund, which is expected to launch with approximately USD70-75 million in assets, will operate as an analogue to the firm's L-R Global Partners fund. The latter has over USD115 million in assets, and will continue to be managed separately, explained J. Murray Logan, managing partner. As with the firm's existing fund, L-R Global Fund will primarily use equity derivatives, such as the purchase of out-of-the-money puts and calls with short expiry dates, as protection against any anticipated dramatic market falls. The instruments will also be considered as investments, he added.

Five-year credit protection on Philip Morris U.S.A. exploded to trade as wide as 350 basis points last Wednesday, in from 180bps seven days previously. Movement on the name was motivated by credit concerns after its parent, Altria Group, was ordered by an Illinois court to post a bond of USD12 billion in order to appeal against a decision that holds the firm liable for misrepresenting the danger of its 'light' cigarettes.

Wachovia Securities has hired Neil Glassman, a senior equity derivatives salesman at Bear Stearns in New York, to work in a similar position. He was hired as part of Wachovia's on-going effort to build a listed options/exchange-traded fund business in the U.S., said Todd Steinberg, managing director and head of equity-linked products in New York. An official familiar with the hire noted that Glassman is a great catch for Wachovia, having been one of Bear Stearn's best and most senior hedge funds salesmen. Glassman, who will report to Steinberg, will spend most of his time in single stock, index and ETF option sales, however he will also work with over-the-counter options where appropriate, Steinberg said. Glassman could not be reached.

Investors rarely hedge against inflation, thinking the days of hyperinflation are long gone. But inflation can still make serious inroads into an investor's profit. For example, investors buying five-year U.S. government bonds will see real returns fall from barely above 1% to zero should inflation remain at 3%, instead of returning to 1.7%, predicted by the market.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.