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

To: Bobby Yellin who wrote (130)	9/21/1998 9:58:00 AM
From: Worswick	Respond to of 2794

Bobby thanks so much for the good post. Doing my own back of the envelope calculations here... let us revisit some ideas here... "From Morgan Stanley "Based on BIS data, John finds that Euroland banking exposure to Latin America was $133.6 billion in year-end 1997, more than double the $63.4 billion exposure of US banks; he also finds that Europe's non-Latin emerging markets exposure (Eastern Europe, Asia, Middle East, and Africa) totals a staggering $292.1 billion, again well in excess of the $53.6 billion figure for the US. Mmmmmm, and remember as per the recent Kathryn Welling report in Barron's ". The underpricing of options resulting from this "catastrophe myopia," Andrew reckoned, meant that the major dealers of equity options -- Merrill Lynch, Morgan Stanley, J.P. Morgan, Bankers Trust and Goldman Sachs, which in aggregate had equity of $33 billion -- could have found themselves on the hook for as much as $400 billion". And add to this the idea, (ibid.) ". some reasonable back-of-the-envelope estimates can be made. With world GDP at about $30 trillion.. based on the relationship between GDP and money supply in the G-7 industrialized nations -- that $30 trillion is also a workable estimate of the amount of money sloshing around the globe. From there, using a rough average of 5% Tier One capital, he arrives at a ballpark figure of $1.5 trillion of total equity capital in the global banking system". Add up the figures. the cash on hand in the banks just ain't up to the money needed. I re read both the Soros testimony nd the Welling article this am and the vegetables are starting to come up... from the bottom of the pot in the stew that's beginning to boil here. My best to you, Clark