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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA
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To: J.T. who wrote (1085)10/26/1999 1:27:00 PM
From: pater tenebrarum  Read Replies (1) of 19219
 
J.T., as to the banks, i'd like to point out that there is some potential for interest rate derivative related losses rearing their ugly head unless there is a significant retrace of the recent rise in rates. the losses on the rate hedges of Fannie Mae and Freddie Mac alone amount in the neighborhood of 25 billion dollars by now. someone has to be on the other side of these trades and i guess it's the brokers and money center banks that have all reported blow-out earnings recently. the derivative positions are largely off-balance sheet and not marked to market. if however rates do not retrace soon, the losses will have to be booked at some point.
just thought i'd point that out, since nobody seems to talk much about it.

regards,

hb
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