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To: patron_anejo_por_favor who wrote (37540)	6/2/2000 4:46:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 42523

they will try to fight a rise in the PoG by expanding their short position at first. if one of the bigger players loses his nerve , or some unexpected news item hits, they could get destroyed overnight however. a big no-no is the fact that Deutsche Bank has expanded its gold derivatives position so much (notional $50 bn.) these guys are ALWAYS wrong when they put on large bets like this. they were heavily long at the peak in '80. i think an unwinding of the gold carry would lead to government intervention...openly. otherwise the whole banking system could be endangered. there is simply no gold around with which to cover the loans. probably Fort Knox will be used to provide it once the fit hits the shan, as it inevitably will.

To: patron_anejo_por_favor who wrote (37540)	6/2/2000 7:02:00 PM
From: re3	Read Replies (2) \| Respond to of 42523

patron : if you short 100 shares of jpm at 140, you stand to make a max of 14k if you bought 2000 shares of hm at 7, that is a cost of 14k. however, if jpm WERE to go to 0, then isin't it highly likely that hm will be at least 14, if not much more. at 14, you'd have made the same 14k. so isin't it more prudent to focus on gold, which is a put on pretty much everything on the long side anyway (but doesn't expire or deteriorate in value in the same way ?)