Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Pancho Villa who wrote (7222)	4/17/1998 9:17:00 AM
From: Joey Two-Cents	Read Replies (2) of 18691

The derivatives holdings of U.S. commercial banks increased 26.5% over the first nine months of 1997, up 50% from 1996. Chase Manhattan's derivatives exposure is equal to U.S. GDP and the U.S. banking system as a whole has $62 in off-balance sheet derivatives for every dollar of equity capital and $5 for every dollar of assets on the banks' balance sheets. A loss of 1.6% on the banks' derivatives portfolio would be enough to wipe out the ENTIRE EQUITY CAPITAL OF THE U.S. BANKING SYSTEM. ( emphasis mine ) "The Bank for International Settlements reported in November that $82.6 trillion in derivatives were held by 79 selected financial institutions in major nations at the end of 1996. Chase Manhattan was tops on the list with $7.9 trillion or 31% of all U.S. bank derivatives. Chase had $364 of derivatives for every dollar of equity and $22 in derivatives for every dollar in assets. Next was J.P. Morgan with $6.2 trillion or $537 in derivatives for every dollar of equity. Seven top banks had $109 billion in equity and $1.7 trillion in assets compared to $24 trillion in derivatives, or $220 in derivatives for every dollar in equity and $14 in derivatives for every dollar in assets. They had 26% of all U.S. bank equity, 35% of U.S. bank assets and 95% of the derivatives. In the first nine months of 1997 about $190 billion of asset-backed securities were issued, up 23% from 1996. It should be noted that J.P. Morgan's final 1997 quarter reflected $54 million in derivative losses and they designated $587 million of assets as non-performing derivatives for a total possible loss of $659 million. Now, if this isn't enough to scare you, you have serious problems." ( As copied from The Reaper 4/9/98 p.10 ) Japan angered by G-7 comments. biz.yahoo.com Parallels of CCI/Travelers merger. nypostonline.com BOJ assures they can survive any financial collapse. biz.yahoo.com Nissan facing downgrade biz.yahoo.com Financial markets keep pressure on Japan biz.yahoo.com Goal of Japan to get rates up biz.yahoo.com Goal of Japan to keep rates down biz.yahoo.com Trade deficeit reported today largest ever, GM reports earnings .02 below estimates. Lets just get this negative news out of the way on our trip to 10,000.

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