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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (339377)	7/30/2007 4:35:34 PM
From: hunchback	Read Replies (2) \| Respond to of 436258

Ok thanks...wake me up in another 5 years -g-

To: Lucretius who wrote (339377)	7/31/2007 9:28:47 AM
From: Tommaso	Respond to of 436258

From Sowood Capital's letter yesterday to its clients. A sort of "Dear John" saying goodbye to their financial assets. The guy running this fund was the great genius hired for some time by Harvard, I believe, to manage their endowment: During the month of June, our portfolio experienced losses mostly as a result of sharply wider corporate credit spreads unaccompanied by any concomitant move in equities and exacerbated by a marked decline in liquidity. This occurred over a broad range of credit related instruments. In the first two weeks of July, spreads continued to widen, and we experienced a loss similar to June. The weakness in corporate credit – particularly focused on loans and loan credit default swaps – accelerated sharply during the week of July 23. Until the end of last week these developments, while reducing the value of our portfolio, were manageable. Our counterparties had not severely marked down the value of the collateral that the funds had posted nor changed our margin terms, and immediate liquidity needs could be met. However, towards the end of last week, given the extreme market volatility, our counterparties began to severely mark down the value of the collateral that had been posted by the funds. In addition, liquidity became extremely limited for the credit portion of our portfolio making it difficult to exit positions. We, therefore, reached the conclusion over the weekend that, in the interest of preserving our investors’ capital, the appropriate course of action was to sell the funds’ portfolio. We believe that the arrangement with Citadel provided our best option under the circumstances, since we were unable to find other sources of liquidity. Conclusion We are very sorry this has happened. We have always attempted to do the very best for our investors. A loss of this magnitude in such a short period is as devastating to us as it is to you. We are committed to acting in the best interests of the funds’ investors and to keeping investors informed of decisions made in furtherance of this objective. We sincerely appreciate your patience and understanding during this challenging period.