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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: h8_2_b_l8 who wrote (4273)	7/27/2002 1:10:49 PM
From: t2	Read Replies (1) \| Respond to of 30712

If JPM "fails" and requires a bail-out from the U.S government, the US government would require JPM to unwind this massive derivative position fueling an insane rally. How do conclude that it would fuel an insane rally? ...stocks or bonds or gold? (I did not see any comments about this leading to a rally in the article) Very interesting article.

To: h8_2_b_l8 who wrote (4273)	7/27/2002 1:28:16 PM
From: Boca_PETE	Read Replies (1) \| Respond to of 30712

h8_2_b_\|8: re:("the US government would require JPM to unwind this massive derivative position") Interesting article, but can you provide the rationale under which the government would make such a requirement? Also, by "massive", I guess what is being referred to is the "NOTIONAL AMOUNT" of JPM's derivative position. However it's my understanding that under a derivative contract, the parties agree to pay or receive from/to each other THE CHANGE IN VALUE of the notional amount of the designated underlying (ie. commodity, foreign currency, debt instrument,...whatever or some combination these), NOT THE NOTIONAL AMOUNT ITSELF. Thus to me it appears to be a question of whether or not JPM has the resources to pay out any NEGATIVE CHANGE IN VALUE of its' "massive" derivative position. As you can gather, I have my doubts about that doom-gloom article you linked to. P