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

To: James C. Mc Gowan who wrote (146)	9/24/1998 6:23:00 AM
From: Zardoz	Respond to of 2794

"It also always reassuring that the Federal Reserve is there to help bail out these pirates;..." And the IMF to bail out countries? LTCM for all intense and purposes hasn't been a HEDGE FUND for months, maybe years. The had become a speculative fund. Once they capital requirement was outstripped by exposure, they moved to unsecure leveraged derivatives. Remeber this. Speculator: "One who is prepared to accept calculated risks in the market place" Hedge: "A protective manoeuve; a transaction intended to reduce the risk of loss from price fluctuations." Quotes: CSC 1998. Consider this: If the TOTAL stock market Valuations is $13 Trillion. Than the 25% decline of the markets was worth 3.25Trillion. This 'Hedge' fund {the largest} loss, about $100 billion... or 3% of the total correction. And that was their speculation. Now how much of it was due to Japanese market manipulation? AKA the reason for the fed intervention. {Had the FED not support the Yen, maybe it would be a $100 Billion profit?}

To: James C. Mc Gowan who wrote (146)	9/24/1998 6:43:00 AM
From: Henry Volquardsen	Respond to of 2794

I would be very interested in what you think the people at Long Term Capital were doing that qualifies to be called pirates? For the record their own capital is being wiped out in this bailout.

To: James C. Mc Gowan who wrote (146)	9/24/1998 8:27:00 AM
From: Worswick	Read Replies (3) \| Respond to of 2794

James I don't think it is fair to call bankers "pirates". It is most unfair in fact. The bankers involved in all these transactions were and are on the cutting edge of financial modling. Their "mistakes" are like the first people who tested the first supersonic airplanes. A lot of them died. ...I don't for a minute think of the aricraft pioneers as pirates. Similarly, I don't think any banker would.... with knowledge aforethought... go out to bankrupt his bank, or hedge fund. The derivative world simply got ahead of itself... without understanding that they were dealing with a 20th century bureacratic international banking structure.... with 21st instruments (eg. computers). It is almost impossible to blame the 1980's bankers on the Latin American melt down when the American banks took it upon themselves to recycle the world's petrodollars and stood behind this recycling with their own bank's capital. Coming back to the point. Both bankers and hedge fund managers live or die by their preformance. In our capitalist system we have created millionaires and people who sleep in refrigerator boxes. There are no old age homes for failed hedge fund managers: the failed hedge fund manager will be lucky if he has a single friend who will let him sleep on their couch.... after the crash and the burn. Their women leave them, their "friends"; it is a long way up and a long way down. ... to characterize these people as pirates is unfair. They are the adventurers of our period. The great explorers. Americans just don't like failure. While these people were successful did I hear a single word about "pirates"? ...in the 70's I knew some of the Wall Street fallen heroes. Boy. These guys life was over. Maybe what many of these people are learning is that it is a long way up and a long way down. Maybe at the end here afte this all works out we will all learn something here about national hubris. In the meantime I understand your anger and frustration and this is only the beginning. I only caution you about demonizing specific individuals when it is the system that created this problem. This is a systemic problem, not a national or individual problem. The whole world embraced the "success" of these products. Now we will all pay the price. Afterall who bought these things. The answer: Everyone. With best wishes -- Clark

To: James C. Mc Gowan who wrote (146)	9/24/1998 9:51:00 PM
From: Tom	Read Replies (2) \| Respond to of 2794

James C., You go ahead and call them anything you'd like. Joanie McCullough at Bear Stearns....(on Greenspan) "Yesterday, he made the switch to justifying his new attitude by citing 'disruptions abroad' and 'more cautious behavior by investors at home' which has struck a 'balance'. ('Cautious behavior?' You mean the guys who got their socks blown off in August? 'Balance'? Surely he must mean 'between a rock and a hard place'!) All along he knew he had a meeting at the Fed several hours later to frame a bailout for a huge and noteworthy hedge fund. Question: Who else knew?" stocksite.com _____________________________________________________________________