Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: ldo79 who wrote (6081)	1/5/2002 10:41:40 AM
From: mishedlo	Read Replies (3) of 36161

Is this the right thread for this. Since there seems to be be an interest here I will post a discussion that took place elsewhere. ========================================================== From Steve Lee On JPMs gold and Financial derivatives zealllc.com Followed by my reply. ====================================================================== Zeal's last essay on the JPM monster was irrelevant and so is this new one. They harp on about notional values and shareholder equity but fail to explain how these equate to risk. When the first essay was written, I thought the author was either mistaken or just being dramatic to get readers to his company's website. Now I believe they are being manipulative to support their own JPM short position. Numerous times this Zeal article has been posted on SI and numerous times I have asked how it is relevant and what would have to happen to make the unexplained risks evident. I have never received an explanation. The ratios they present as scary large numbers are perfectly in line with what might be expected from such an organisation. To understand the risk to JPM, we need to know what form the derivatives take. That information is not presented in the Zeal essays. ======================================================================== Steve, you likely would have said the same thing about ENE's exposures or LTCM exposure. Things look great until they do not. Count me in the group however that says Greenspan will not let JPM fail. If JPM has huge bets against gold, the US will sell gold until it has no reserves left. If JPM has huge bets on the US$, well Greenspan will take care of that as well. wink wink nudge nudge This will all work until some outside force makes the $ collapse or Gold rise. Otherwise you are correct there is ZERO risk. Likewise there is ZERO risk FNM goes under with its 1000 to one leverage(or whatever it is - I made that number up but it is large) in the mortgage industry. ENE LTCM Oh those were just flukes. Can't happen again. No way. Impossible. Risk? Exposure? What risk/what exposure said the ostrich. M =========================================================== From Zeev You need an act of Congress to let gold out of Fort Knox, I believe. The US managed to persuade all other CB to sell their gold, but has not sold any of it's own, if memory serves. I am sure George knows the details much better than I on that one. Zeev ======================================================================== Wow I did not know that. However, when will others get tired of selling gold to support US interests. In a way your sentence is more ominous eventually is it not? Of course the key word is EVENTUALLY. When might that be? M ============================================================ Comments anyone? M

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