Derivatives: Darth Vader's Revenge Message Board

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Non-Tech : Derivatives: Darth Vader's Revenge

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To: Worswick who wrote (1053)	2/6/2002 10:10:15 AM
From: Henry Volquardsen	Read Replies (3) of 2794

Hi Clark, I'm not that concerned about JP Morgan-Chase derivatives exposure. With all due respect that article strikes me as the usual gold bug scare rhetoric about derivatives. The overwhelming proportion of the derivative risk is probably very straight forward stuff and relatively easy to hedge. If there is any risk it is possibly underlying credit risk as oppossed to a structural risk in the derivatives themselves. A lot of this is just the 'round up the usual suspects' syndrome. The size of the exposure appears mind boggling without knowing what the specifics are. Makes it an easy target for rumors. If there were more problems in derivatives risk there would be rumors on the street. There were plenty of rumors long before the other problems. The market tends to know what is out there. I haven't been hearing any runors about anyone suffering large scale problems in derivative risk. At this point in the cycle I'd be more concerned about credit risk. Henry

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