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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (40)	9/7/1998 10:48:00 AM
From: Worswick	Read Replies (1) \| Respond to of 2794

Henry good morning to you this am. I have to say your continuted presence on this thread is quite wonderful and inspiring. You are quite wonderful and I mean that sincerly... to give us your insights about back off risk, systemic risk, your take on the health of the world financial system. I wanted to address your frustration about the Japanese and their continued inability to act in a punctual and coherent manner in regard to thier ongoing financial problems. Basically, what you and everyone has to understand is that Japan is broke; Japan is busted; Japan is bankrupt. If they admit this they will loose tremendous face in Asia and everywhere else. It is simply a matter of the Emperor has no clothes. See my post on the Asia Foruum.... Message 5523877 Once you understand this tell me because I want to believe that all the derivatives that depend on Japanese solvency will stand up. Jesus. I do hope so. I simply can't see how that is possible however much I wish this, or anyone else. Today I wrote on another thread my following worries...

To: Henry Volquardsen who wrote (40)	9/7/1998 11:02:00 AM
From: Worswick	Respond to of 2794

Henry good morning to you this am. I have to say your continued presence on this thread is quite wonderful and inspiring. I wanted to address your frustration about the Japanese and their continued inability to act in a punctual and coherent manner in regard to their ongoing financial problems. Basically, what you and everyone has to understand is that Japan is broke; Japan is busted; Japan is bankrupt. If they admit this they will loose tremendous face in Asia and everywhere else. It is simply a matter of the Emperor has no clothes. See my post on the Asia Foruum.... Message 5523877 Once you understand this tell me because I want to know that all the derivatives that depend on Japanese solvency will stand up. Jesus. I do hope so. I simply can't see how that is possible however Henry. It defies the imagination that the second largest economy in the world goes belley up and we can stand apart. Today I wrote on another thread my following worries... Ref yours Peter: "....As far as protection, are dollar bills better than gold or other precious metals in your opinion? Because of deflation? Under what scenario are treasuries not so good as dollar bills? How are you actually hedging yourself currently?" To answer your questions in a deflation... natural resources (gold and silver) are dumped by the producers massively to create liquidity. Thus, S. Africa dumps gold (even though they produce at over $300 per ounce), Russia, etc. Dollar bills, marks, pounds...are the ultimate "hedge" in the thermo-nuclear explosion of the "dirivatives" in the financial system. ...in this scenario the banks close for a "holiday". Treasuries are "frozen" like the FDIC guaranteed savings accounts until it is clear what to do and who to punish. What in hell do you do to buy groceries. Forget trying to buy your neighbors land for $23.50, or a Bentley for $3,000. In this scenario puts that made you millions, being short the market and even US treasurey obligations are not as good as some cash to buy gas and groceries. The ultimate hedge here is simply getting your grocery store to take a check, or your credit card: failing that have some cash. To all this today Allen G. looks like he will lower interest rates, the market will take off Tuesday...hugely. We seem to be "decoupling" from Japan in a very aggressive way. This will be wonderful for the European and American markets until... the next episode of "the great derivative crisis". I am not saying this will happen. I just worry that it will happen. Again..the ultimate hedge here is simply getting your grocery store to take a check, or failing that your credit card: again I'd think this through each and everyone of and have some cash. Look at Stitch and Bernie who participate on our ongoing Asia Foruum here. They live in Malaya... tell me did anyone in their wildest imagination think that, after almost year of corresponding with these guys. that these really sharp and astute peoeple would be trapped inside a financial system that is melting down around them? I mean to say these chaps are smart; they are the condottori of international trade; and, they are the absolute cutting edge of where it is at! My point is what does it cost you to go to a bit of cash. Your 3% in your savings account for the next four months? That is the cheapest insurance I can think of. I do hope I am wrong here. My best to you, Clark