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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Chisholm who wrote (8817)	7/9/1999 12:29:00 PM
From: Bosco	Read Replies (1) \| Respond to of 9980

<o.t. or Annualize This!> hi Daniel, Mr Soros and his crew may not be able to double his entire fund overnight, especially when the cat is out of the bag, so to speak. However, he does hold the dubious success of making off with a cool billion pound by attacking the Bank of England awhile back. If one is to annualize the return, probably it is more than double best, Bosoc

To: Daniel Chisholm who wrote (8817)	7/9/1999 3:36:00 PM
From: Zardoz	Read Replies (1) \| Respond to of 9980

Example: Let's say you are Canada and you have $20Billion US denominate Dollars of assets to defend you currency. $10 Billion in Gold, $10 billion in US Dollars. Your local hedge fund has $50 Billion US Dollars. Using a 20% margin requirement {high side}, they short $20 Billion {or $100 Billion of margined} on the bond market over time. Next they accumalate CAD Puts say $5 Billion, then start pushing the CAD down with the remaining $25 US Dollars. So Canada has the choice, defend the currency, eats hard assets; of let it float. If it floats, the bonds are worth less in US dollar terms: {$130CAD.7200US/CAD-> $130CAD.63US/CAD = -12.5% {$11.7 US} If you defend, you raise rates: ($130CAD.72US/CAD-> $110CAD.72US/CAD = -15.4% Truth lies in between there, more likely, both the currency will drop, and the bonds. I'm only doing this off the top of my head, but I'm sure you could make 100% or more if you sat down, and worked it out on paper. But when Soros does this, others start to jump on. Many chase Soros's plays. And why wouldn't they. Hutch.