Information like this is sketchy, for obvious reasons, but there's the good example two years ago of Honda which made a good profit on selling cars and lost every penny of it because they didn't hedge their exchange rate exposure. The other side is peach farmers in the US who have had significant crop failure in 13 out of the last 14 years. There's one thing you can say about peach farmers that are still around: they hedge.
My point is that looking to the proprietary trading desks of investment houses about the risks of using a leveraged instrument in a speculative activity is like looking at the Indianapolis 500 for proof that "speed kills" ...
I believe Michael was implying that "derivatives are bad" which I think isn't a correct characterization of the situation.