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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (972)	10/23/1999 4:47:00 PM
From: JG	Read Replies (1) \| Respond to of 2794

Henry, you say, "...has greatly facilitated an increase of liquidity but even more importantly it allows for risk transference..." For those of us that are trying to get a better handle on this issue, would you please give us some concrete examples of these increases in liquidity and risk transferences. Thank you for your participation. I have learned a great deal from you and others on this thread. JG

To: Henry Volquardsen who wrote (972)	10/23/1999 5:38:00 PM
From: Merritt	Read Replies (1) \| Respond to of 2794

Henry, I won't expect someone to offer a penny for my thoughts,<g> but I do have question or three: aren't the computational models used to determine the risk/premium predicated on averages - averages that don't necessarily account for dramatic events and swings? With the trillions of dollars of potential risk exposure (in reality probably only a few hundred billion<g>) in the event of a major, and protracted, move in interest rates, or market indexes, and/or forex, isn't it a possibility that these wonderful vehicles could cause a smash-up of our entire economic system, or are there collars in place to limit loss? Didn't AG bail out LTCM just because of such fears?