Today’s all-the-things-are-the-same-thing news, sort of, is Bloomberg’s report of the tiff between BlackRock’s Larry Fink and a guy at “Lyxor,” which is the name of SocGen’s ETF business and also a good way to make me think of the words “pyramid,” “casino,” “typo” and now “SocGen” all at the same time, which does not make me want to invest with them. Anyway, the crux of it is this:

So-called synthetic ETFs, offered by firms including Societe Generale’s Lyxor Asset Management and Deutsche Bank AG, introduce a layer of complexity and counterparty risk that investors may not be aware of, Fink said yesterday. Synthetic funds generate returns through derivatives contracts rather than owning underlying securities as traditional ETFs do.

“If you buy a Lyxor product, you’re an unsecured creditor of SocGen,” Fink, who heads the world’s largest asset manager, said at a conference held in New York by Bank of America Corp.’s Merrill Lynch unit. Providers of synthetic ETFs should “tell the investor what they actually are. You’re getting a swap. You’re counterparty to the issuer.”

Lyxor says au contraire mon Fink, physical ETFs are just as bad:
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