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To: Bonnie Bear who wrote (7753)	11/13/1997 1:12:00 AM
From: S. maltophilia	Read Replies (1) \| Respond to of 18056

BB Some of these banks' book values can be suspect. I fondly (g) remember First Republic from the 80's that anyone could look up in their stock guides and see the ~$29 book. They never mentioned that $40 of it was bad loans. Ditto MBank (their Momentum commercials are retrospectively hilarious), Banctexas, Continental, and any number of New England banks. If you have a few names that are already obviously worthless, sure would like to hear a few. Sitting with some CMB Jan 90 puts I've owned since August. 'Bout time!

To: Bonnie Bear who wrote (7753)	11/13/1997 11:23:00 AM
From: Zeev Hed	Respond to of 18056

Bonnie: In terms of basic valuation you are absolutely right, but the problem is that there is still a lot of money sloshing around, and those little banks are being gobbled up by each other in a process of consolidation which may take some time to complete. This process keeps those valuations artificially high. Rationality will not come back at once, either the liquidity will be soaked (in essence contraction in either money supply or budget surpluses), or a much slower process of valuation rationalization will emerge. I think that we are not ready for the "Big Bad Bear" yet, and that is why I do not think we will go as low as 500 on this bear. These, are however, just opinions. Zeev