Comment: Question About Rehypothecation

(See in situ)


Question About Rehypothecation

I found this article on zerohedge.com (see: http://www.zerohedge.com/news/shadow-rehypothecation-infinte... ).

It seems to me that rehypothecation is a form of derivative that banks use to pledge collateralized debt as their own collateral for speculative investment. Is this correct or am I off base?