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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (26596)	3/11/1998 3:44:00 PM
From: Mike M2	Read Replies (2) \| Respond to of 132070

MMV, I would guess some of the losers in derivatives in the SEA collapse ( no Bill C. it is not a glitch in the road) are unwilling and/or unable to pay. A short time ago there was a story about a S. korea court ruling that a firm did not have to pay Morgan? several hundred million dollars because they did not adequately explain the risks. I'd bet there will be more of these to come. Mike

To: Cynic 2005 who wrote (26596)	3/11/1998 6:00:00 PM
From: Knighty Tin	Respond to of 132070

Big MO, It makes some sense, though I don't understand about the 9 and 8 bit. But the derivative exposure of the banks and the brokerage firms is enormous and you have to wonder, just who is guaranteeing the other side? And you don't know even if you know that. For example, you may have a derivative backed by Barclay's, a good bank. But Barclay's may have that position hedged off with a Hong Kong bank who has a Thai bank hedge with them who is backed by an Indonesian bank. It is all a bunch of dominoes. So far, every time a domino has fallen, regulators and healthy banks have stepped in to keep it from hitting the next domino in line. Barings could have easily have started a disaster, but it didn't. That shows folks are aware that they have to act fast. But Barings was also a dinky bank. If a big one falls, who will step up to eat that loss? So, a disaster is likely. It is sort of like nuclear weapons in the hands of terrorists. Yes, we are vigilant, but it is just a matter of time before somebody goes boom. And so dang many of those terrorists like Houston. -g- MB