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To: Freedom Fighter who wrote (1771)	6/14/1999 11:05:00 AM
From: Henry Volquardsen	Respond to of 3536

Wayne, I understand that. The industry doesn't do itself any good either by not publishing data in clear and unambiguous language. People are naturally wary of that which they do not understand. LTCM is a good case in point. You raise it as an issue that compounds peoples concern regarding derivatives. From my perspective I consider the derivatives component as incidental. The real culprit in LTCM's case was excessive leverage. All of the positions that caused them trouble could have easily been taken without the use of derivatives. The excessive leverage that LTCM was allowed to take is what brought them down. This says more about management decision making than anything fundamental about derivatives. But derivatives make an easy excuse. Instead of confronting the abysmal failures in credit process by the banks involved it is much safer for those banks to point the finger at derivatives. Henry

To: Freedom Fighter who wrote (1771)	6/14/1999 4:13:00 PM
From: Worswick	Read Replies (1) \| Respond to of 3536

Henry and Wayne...the men. Hello to you both. As you know Henry - over very many posts - I am doubtful about the hedges here in derivative and swap land. In a waterfall decline a hedge is about as good as the last guy in line to believe in it. With $180 billion of margin debt curently outstanding, and accordng to Paul Volker... the world dependent upon the US for continued prosperty whuile the US is dependent upon the market for prosperity. "The market" being 50 Dow like stocks... 50 % of which have never made any money were are, at best, in for interesting times. My continued best to you both, Clark NB. When will the Herstatt "effect".... be called the Banker's Trust/Citibank/ Morgan "effect"?