I'm fascinated by the new commodity ETN's offerred by iPath. But after scanning the prospectus, I have some concerns.

The ETNs don't hold commodity contracts directly, but involve a complicated contract with Barclay's bank.  If the bank has credit problems, the market value of the ETN's would suffer, even if the commodity index it's supposed to track is performing well. (Not my opinion--it's all over the prospectus).

Barclays is described as "distressed", with a debt/eqity ratio of 8.05. However, it's getting a better price on credit default swaps than most banks, according to this: 

http://seekingalpha.com/article/82222-bank-and-broker-default-risk

... I assume because its loans are sound, even if it has a lot of them?

Plus, of course, the question of whether there will be any liquidity for trading these securities; but that's anyone's guess at this point, I would imagine. 

Your opinions, please? Are iPath ETN's a safe-and-effective way to invest in commodities? 

BTW, I picked the FF board to ask, because when I searched for previous posts about commodities, most of them were here. 

--Aalan