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Non-Tech : Derivatives: Darth Vader's Revenge

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To: Worswick who wrote (908)4/12/1999 11:18:00 AM
From: accountclosed  Read Replies (1) of 2794
 
Clark, thanks for posting and sharing your thoughts. I have a few preliminary reactions and have printed your post--so I may have more reactions after I digest your post more.

My primary reaction is that the post of mine you linked was a summary post of what had been said on the thread over many posts. Henry had led the discussion, as he has much more knowledge and experience in this area than I do. I came to the thread with some ideas, but lots of questions. I was able to follow, I think, what Henry was saying, and restate the crux of the arguments. I believe that Henry's goal is to have a roundtable of discussion to continue the debate and not to say "This is how it is...enough said." So I, and I believe Henry, welcome your comments.

I believe the equity markets are quite overvalued at this juncture and that derivatives can make market imbalances more explosive and dangerous. However, to the question is there systemic risk due to derivatives in the banking system?...I don't have evidence to that end. Your post sets your thoughts in perspective, but can you offer more detailed evidence of the risks that you see as truly threatening the stability of the banking system?

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