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

To: Henry Volquardsen who wrote (151)	9/24/1998 9:37:00 AM
From: Worswick	Respond to of 2794

May I say that the world financial system is in tatters.... but it just doesn't know it yet? Many thanks for the correction about Leeson. And many thanks for your pointing out the Long Term Capital positions. As usual you are an ornament to our discussion here. My best to you, Clark

To: Henry Volquardsen who wrote (151)	9/24/1998 9:46:00 AM
From: Bobby Yellin	Read Replies (1) \| Respond to of 2794

I was surprised by your response. Hasn't a great deal of liquidity been evaporated? Hasn't confidence eroded over too important to fail? Why is the XAU now going up with the market? Thinking that all the attention on President's mess has been distracting the world from what has been going on lately in global meltdowns. Bobby

To: Henry Volquardsen who wrote (151)	9/24/1998 10:36:00 AM
From: Sam	Read Replies (2) \| Respond to of 2794

Henry, " The really big torpedos that hit LTC were old fashioned leveraged bond trading. They were long mortgage back securities and short US treasuries. As credit spreads widened they got hammered." So does this mean that the spread between mortgage securities and the 30 year bond will widen still further than it already is (and it's historically pretty high right now--about 1 1/2%), as this position is unwound? Or is the position too small to matter? I have a vested interest in the answer to this question, as I am about to buy a new house, and am wondering if I should lock in 6 1/2 now, or wait a few more weeks. Or, for that matter, if deflation is indeed what is happening now, get an ARM. Any opinions?