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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (12872)	10/27/1997 4:46:00 PM
From: Carlyle	Respond to of 50167

Ike, How much of this selling might be attributed to the big mutual fund managers locking in profits that their bonuses depend on? Carlyle

To: IQBAL LATIF who wrote (12872)	10/27/1997 5:11:00 PM
From: Rupsky	Read Replies (1) \| Respond to of 50167

Iqbal, I think we have seen "Value at Risk" at its best. All financial institutions are nowadays calculating and managing their risks using pretty much the same computerized approaches. The US market got under pressure not so much "in sympathy" to HK but because some HK exposure had been hedged based on correlations between HK and the msot liquid market, the US. Unfortunatelly, when everybody does the same, there are no buyers left - hence the debacle, specifically after the first halt. It was not portfolio insurance this time, but futures seem to give too many people a sense that risk can be easily managed. It will be interesting to see what lessons we are learning this time - and how long it will take to forget them again, because we have given the game another name. Good luck to all of us - whatever our positions are. Rupsky