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Strategies & Market Trends : The coming US dollar crisis
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To: carranza2 who wrote (16306)1/14/2009 3:47:01 PM
From: Real Man  Read Replies (2) of 71454
 
You can, and some did get consistent 40% returns for selling
puts LTCM way, and many leveraged CTAs did. Delta hedged,
of course, but not Black Swan
proof. Where are they now? Selling CDS was highly profitable
as well, as spreads kept falling. Those sellers are now mostly
on the Fed's payroll because of the widespread systemic
collapse a release of these beasts would cause, except they
let one (Leh) get away by mistake (and that caused October
crash).

His strategy used derivatives as well, who knows how. It was
likely real and made money while volatility kept declining.
Then it blew up along with everyone else's strategy. He was
too scared to report problems because of immediate redemptions
it would cause. This IS a jailable crime, but, technically, not a Ponzi
scheme. Except that all derivatives are and all hedge funds are
- selling flood insurance is highly profitable until the flood
comes. It came to equities in 2008. When was the point when Bernie
turned his fund into a Ponzi scheme by lying to investors?
We may never find out. But taking money from family and friends, then defrauding them? No way. OPM managers are
liable to lawsuits whenever they lose money, unless they
follow everything to the book. Even investing not according
to your prospectus can put you in jail.
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