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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (81590)	6/11/2000 1:36:00 AM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 132070

twfowler, >>What are leap credit spreads? Here is a cut and paste from one of MB's posts on the idea: (I don't think he will mind) "Much more difficult and perhaps impossible to explain to her are credit spread butterflies. But they are dandy income generators. In this one, you hold cash in a money market to collateralize the deal. Then, you sell a bull credit spread and a bear credit spread at the same strike price. For example, if UCL is at $35, you sell a $35 call and buy a $40 call, same month. Then, you sell a $35 put and buy a $30 put, same month again. This should be done at no capital risk. In other words, your net credit should be more than $5 in the example above. Then, she holds $7000 in money funds to collateralize all possibilities. She gets interest on that, and on perspiration day, she gets as much as $5 and as little as zero as a bonus. If played with the right stocks, that can boost her income trememdously. But it is a tough game and I have had trouble explaining it to pension fund managers, much less a mother in law. <g>" During these days of risk in our mutual funds I purchase 13 week T-Bills. I legged into these by purchasing 1/13th of my cash for 13 weeks and roll them each week. My broker is happy to use this as collateral for these spreads. I played with this idea for a while on a spread sheet until I felt comfortable with the idea. I have been doing these spreads using leaps on these volatile stocks. One can do them on just one side of the spread either bull or bear, depending on which way you think the stock is going to move. My goal with these is to maximize my income with zero risk of my capital. Joan

To: TimF who wrote (81590)	6/11/2000 3:09:00 AM
From: cary garner	Respond to of 132070

ike & mb : i just posted a link that contained the same article ike had posted from the gold eagle link. sorry. the bank derivative exposure is huge. easy al and the govs must discuss this issue behind closed doors. even with the fed as a safety net, i like the big bang ending. at some point even easy al won't be able to control the damage. some people on ws ( and main street!) are going to take a hit. these bust on ws are a regular part of our history. in the past there has times when the fed failed to bail out its ws cohorts. easy al has recently mumbled something about " no firm is to big to fail. " ws "knows" that easy al will always be the printer of last resort. maybe/maybe not. the fed always gets itself backed into a corner where it can't bail out ws. to do so would kill the dollar and wreck havoc in many others areas. we all know the only question to be answered is can the boys in dc keep the merry-go-round going to the 1st of november. i don't think the boys in dc (easy al included) will be able to pull it off. too many events in the "real world" are already in motion that will cause problems in the weeks ahead. japan raising rates,ecu raising rates,ect. all over the world printing presses are being turned down. there is talk the central bankers of the world are tired of printing money to help the us bubble. this thing is going to pop before the election. bush (scrub?) is already ahead in the polls.what the hell, blame it all on gore/clinton (correctly!).and don't forget easy al! blame him also. bush will promise to get rid of him as soon as he gets in the white house. seems like an all american ending to me. bush,the white knight in cowboy boots, rides in to save us from all this economic carnage. i know this seems like a lot to happen in five months,but hell,this election has been a big yawner. a ws crash in mid-summer will add some spirit to the debates. the old guys go out dragging their asses and the new guys ride in on a white horse. p.s. bet bush will promise to take steps to get the stock market "back to pre-crash levels".