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To: patron_anejo_por_favor who wrote (250564)	7/16/2003 5:58:41 PM
From: KM	Respond to of 436258

Buzz and Banter Some quick observations The convertible bond market, suffering from marginal but continual dividend increases but more importantly, heavy supply in new issues, is in shambles right now. Dealers are full of inventory as bond managers continue selling old issues to buy the new ones. The VIX index is beginning to perk up, confirming the indication for a sharper increase in volatility. A reason not well documented for the improvement in corporate bond spreads is the new buying being done by hedge funds that buy distressed paper and hedge some of the risk away by buying puts on the stock. It seems that as these bond spreads began to improve from extreme levels, more money began to flow into these types of funds and hence, they put more money to work, further improving the spreads. Is this an indication of a better economy, or just the result of typical money flows chasing returns? Time will tell. John Succo No positions in stocks mentioned. John Succo welcomes your comments and feedback at Succo@minyanville.com and invites you to check out his explanatory series on the basics of derivatives by clicking here. John Succo is the Chief Investment Officer and co-founder of a New York-based hedge fund concentrating in derivative strategies with approximately $175 million under management (the "Fund"). Prior to his current role, Mr. Succo was head of risk and a member of the investment allocation committee at Alpha Investment Management, a New York-based fund-of-funds. Prior to that, Mr. Succo was an options trader and head of derivatives at various Wall Street firms.