Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (57052)	12/9/2004 1:58:41 AM
From: Taikun	Read Replies (2) of 74559

Jay, This violent dollar rebound stockcharts.com may strike down other currencies and PMs, and the dollar index may even crest 85 soon, but when it does, I'll be back on those currencies and PMs like a T-shirt in a monsoon. I keep asking myself, aside from the losses at CAO, the failed Singapore oil trader, where is the news of the hedge fund collapses amid these whiplash moves? I had a call from a hedge fund manager yesterday. They collected $50m from about 100 clients (many presumably took out mortgages on the paper wealth in their homes) and started a fund of $50m, they then leveraged that position with debt (didn't say how much) and they are betting on Treasury futures and making money on the spread of 100bp. He claimed he'd made $10m this year personally. I suppose if they'd turned that $50m into, say, $200m (4:1) and then were betting on futures at 100:1 ($20bn) and if they made 100bp (ie 1%, or $200m), even after financing charges, that would be a fantastic return. OTOH what happens if the trade quickly goes the other way? Like this chart: (Lehman 20yr T-bill) stockcharts.com and where does this chart go? Japan? T-Bill:USD stockcharts.com D

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