Some Hedges Are More Equal than Others

Companies that use derivatives to hedge against commodity price swings may have dodged a bullet, thanks to the .

In voting to exclude oil companies, airlines, farmers and others that rely on hedging for economic reasons -- so they won't have to put up margins for swaps -- it insulated such big names as Ford Motor, Boeing, General Electric and Shell Oil. All of them regularly use derivatives, at least in part, to protect themselves from price swings. And, of course, the ruling comes on the heels of a massive lobbying effort on the part of hundreds of U.S. companies.

Given the upswing in global volatility -- whether one is looking at a disaster in Japan or a revolution in the Middle East -- .

"Congress recognized the different levels of risk posed by transactions between financial entities and those that involve non-financial entities," at the opening of Tuesday's CFTC meeting, at which the proposed exemption was approved. "Transactions involving non-financial entities do not present the same risk to the financial system as those between financial entities."

Commissioner , who voted against the proposal, though, called the rule "the poster child for a failed cost-benefit analysis." Rhetorically, he asked fellow commissioners: "What are the costs associated with the segregation of collateral at a custodian bank? It certainly is not free."

Ambiguities certainly remain. Many companies use derivatives both to hedge against price swings and to speculate financially, and their accounting practices may be poised to rival Enron in their segregation of balance sheets.