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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (1557)10/18/2003 5:33:40 PM
From: Ramsey Su  Read Replies (1) of 110194
 
mishedlo,

I do not trade futures nor do I have much knowledge in futures. I just have questions.

So Mauldin is correct, then we can suggest, at least in theory, that the agencies are WITHOUT RISK. They can continue to "loss money" or give up part of the profits with the hedges, that is just the price you pay to eliminate the risk.

Now what if they are one day on the right side of these futures contracts? Who is on the other side? What type of risk are they exposed to and how are they hedged? Are there some implied government guarantee that they will not fail, same as the perceived guarantee for freddie and fannie?

Is there another LTCM or LTCMs sitting of time bombs?

Ramsey
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