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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jim Fleming who wrote (1707)	3/10/2004 1:52:20 PM
From: reaper	Read Replies (3) \| Respond to of 116555

Jim -- I have no doubt that the GSE's are almost perfectly hedged, on paper and in their computer models. which as you know as well as i assume liquidity, continuous markets, etc etc etc. what i am arguing is that their "actual" hedges suck; i.e. if they were to ever actually NEED the hedge, it would not be there for them. this is the whole point of the MCHVIE (mass-correlated hyper volatility illiquidity event) that Heinz and i used to chat about lo so many years ago. the basic point is that we should have never let it come to this. but we have, and now we are faced with any number of undesirable outcomes. but burying our heads in the sand and just saying "you know, if we just ignore it / leave it alone, nothing will ever happen" is total bullsh8t. i understand that it is the Baby Boomer generations' MO for dealing with any and all problems (social security; medicare; Ashcroft's usurptation of human rights; Prozac) but its still bullsh8t. the MCHVIE will not ORIGINATE at the GSEs. it will start someplace else (some other farking LTCM genius somewhere). let's see how well those GSE "hedges" work if we do a re-run of 1998. Cheers