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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (19930)	6/30/2007 10:16:55 PM
From: Snowshoe	Read Replies (1) \| Respond to of 218728

I feel increasingly drawn toward the dark side. As credit spreads widen, we can now look forward to a series of warnings and disclosures from hedge funds, banks, insurance companies, pension funds, endowment funds, etc. Here's a local example of the crazy USA debt orgy. Alaska government pension funds have an unfunded liability of about $8.5 billion, so one of our geniuses in the Alaska Legislature wants to borrow $4 billion by issuing "Pension Obligation Bonds" at a low interest rate. This borrowed money would then be invested in higher-return investments making up to 16% interest. In effect, this guy wants to start a government-operated hedge fund! He actually got the House to pass his bill unanimously this year, but it was blocked in Senate committee.

To: TobagoJack who wrote (19930)	7/1/2007 4:50:57 PM
From: Riskmgmt	Read Replies (2) \| Respond to of 218728

TJ: If I may tear you away your teasing CB for a minute and get back to finances:} Are you familiar with Itraxx? www.eurexchange.com itraxx It has been recommended to me as hedge against the sub prime fall out. This product benefits from a widening of credit default spreads and so the worst it gets, the greater the return, up to a 15% cap. As, it was explained to me, the principal is 100% protected, so the risk, is in the return, which could be 0 to 15%. Frankly, my understanding of these things are limited, hence my calling on brighter fellows such as yourself. What is the downside? It sounds like an excellent way to pick up 15% return. regards, Ray