Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (42788)	8/8/1999 1:28:00 AM
From: C.K. Houston	Read Replies (2) of 94695

<Okay. I couldn't bring up the link... Maybe, just maybe, that is the reason for the intermediate technicals going south???> Here's the entire article. I have to type it out, because the "cut & paste" doesn't work here. Markets Fear Hedge Fund Collapse May Be Looming First part of story (previously posted): techstocks.com Here's the remainder ... "There was talk, too, that the Fed was holding back on raising short-term interest rates to keep one of the big securities houses afloat. The problems in the swaps market appear to have initially been caused by concern about the pile-up of corporate issues ahead of the fourth-quarter qhen demand is expected to dry up because of Y2K fears. However, over the last few days talk that a major institution is in difficulty has come to the fore. Some of the big investment banks yesterday admitted privately to sustaining small losses over the past few days but nothing that would result in a material profits hit, let alone a default. Adrian Davis, swaps analyust at ABN-Amor, said yesterday: "Over the past few months spreads have been widening out because of concern at oversupply in the bond market. However, in the last three or four days they have really blown because of concerns about the viability of a financial institution." Said another trader: "The markets are very strained. They are very like they were last year. In these kind of markets people will have lost money." Although hedge funds and Western banks lost up to $30obnwhen the Russians refused to honour their GKO bonds, the real problem that brought LTCM to the brink of collapse was the widening of credit spreads in the swap and high-yielding bonds in ancicipation of yields failing to hits. Cheryl

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