Are you still making your monthly credit card payment in cash? Silly you. The really big borrowers in financial markets in recent years managed to get a so-called "toggle" feature worked into their own payment agreements with banks. Instead of making regular payments in cash, they're allowed to make these payments in extra debt. Instead of coming up with, say, $1 million a month in greenbacks, they can just say "add a million to what I owe you." And many companies with these toggles are doing that today.

Toggles are one of the more hare-brained elements of financial markets that during a flagrantly under-regulated era have turned the hare-brained into an art form. Financial toggles thus deserve to be remembered in verse...

The Tale Of The Toggle

To the uninformed a financial toggle
Seems a dumb idea, a straight out boondoggle;
But the Wall Street crowd took a different view
(One that helps explain why this practice grew);
It fit in quite well with their fondest wish,
To seal a deal, get a fat commish.

Now investors screech, "Where's our monthly cash,
Our bonds ain't junk, they're plain old trash;"
As bond losses mount, their values stressed,
Deal makers shrug, say: "Who could have guessed?"

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