SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : PRESIDENT GEORGE W. BUSH
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Baldur Fjvlnisson who wrote (269661)7/4/2002 12:17:41 AM
From: Doug R  Read Replies (2) of 769667
 
Baldur,

re interest-rate swaps and the resulting vulnerability of companies that have traded their long-term debt for shorter maturities:

goldensextant.com

However, these increases do repeat the pattern that followed the Washington Agreement, i.e., heavy use of derivatives, particularly in the shorter maturities, to try to contain rising gold prices. Indeed, that is the only logical explanation, and will be further confirmed if these same two banks show further increases in their gold derivatives in the second quarter.

JPM: It Just Gets Worse

321gold.com

One study of the newly formed J. P. Morgan Chase banking firm indicates that the company has written derivatives contracts, based mostly on interest rate swings, whose nominal market value is over 700 times greater than the company's capital: $26 trillion vs. $42 billion.

Here is a preview of things to come: In financial circles 10 to 1 leverage is considered very aggressive, 100 to 1 is considered to be in the kamikaze realm, but we don't ever recall hearing about large-scale leveraged operations exceeding 100 to 1 outside of the horrible example of the doomed super hedge fund Long Term Capital Management. JPM's management may have effectively created the most leveraged large hedge fund in the history of the world by using $42b worth of shareholders' equity to control derivatives representing a notional value of a staggering $26.276 Tr.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News