Evidence in support for point (1) in my post on United's Fuel Hedging Program:
Eisman stuck to his sell rating on Lomas Financial, even after the company announced that investors needn’t worry about its financial condition, as it had hedged its market risk. "The single greatest line I ever wrote as an analyst," says Eisman, "was after Lomas said they were hedged." He recited the line from memory: "'The Lomas Financial Corp. is a perfectly hedged financial institution: It loses money in every conceivable interest-rate environment.' I enjoyed writing that sentence more than any sentence I ever wrote." A few months after he’d delivered that line in his report, Lomas Financial returned to bankruptcy. - The End by Michael Lewis, Portfolio.com (December 2008)By the way, if you haven't read the above article about the cause of the financial crises, you should. An absolutely devastating portrayal of who caused it.