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To: larry who wrote (61407)	9/23/2002 4:03:47 PM
From: GVTucker	Respond to of 77400

larry, RE: I believe that the consensus is that if the Fed cannot suppress the gold price and the latter rallies significantly above $330, JPM will be in danger of going under. The gold bugs have continually maintained that the US banks are massively short gold, but I have found no support (outside of heavily biased gold bug Internet sites) for that contention. The primary short sellers of gold are the gold producers, as has been the case for quite some time now. The vast majority of derivative exposure for JPM is in the currency and fixed income markets

To: larry who wrote (61407)	9/24/2002 1:20:31 PM
From: GVTucker	Respond to of 77400

OT, larry, RE: JPM and exposure to gold As serendipity would have it, a firm called Credit Sights put out a report regarding JPM and their exposure to a rising gold price. Their conclusion was that the concern was much ado about nothing. On examination of JPM's Y9 reports to the Fed, the notional value of JPM's gold contracts is $45 billion, a large number when compared to Citigroup's notional value which is about $12 billion. When you look at the change in net exposure, though, any concern goes away for the most part. The net value of the gold derivatives was slightly negative in 1Q01, and rose to about a positive $2mm in 2Q01, when gold had its first breakout out of the $250-$260 range. The net exposure has been around a positive $2mm since that time, according to Credit Sights.