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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (6661)	9/24/1998 1:47:00 PM
From: Henry Volquardsen	Respond to of 9980

Ultimately stability and reform must come from within. What they are hoping to do, I believe, is stabilize the situation so the reforms can take place. The example I use is a patient with a very high fever. One treatment is to plunge the patient in an ice bath to bring the fever down. The ice is not a long term cure but can stabilize the situation temporarily so that medication can take effect.

To: DMaA who wrote (6661)	9/24/1998 2:08:00 PM
From: Paul Berliner	Respond to of 9980

David, Re: the excerpt from the WSJ article attached to your prior post; I scoffed when I read it, because as usual WSJ is blowing the story out of proportion with its dramatic portrayance of hedge funds. Another note: All this nonsense about LTC'c secretive quant methods is a load of crap. They're no different that anyother hedge fund with the same objectives. All in all, it wasn't any sophisticated quant equiation that did them in, just a simple one that wound up being too good to be true for LTC and countless others. Math: Funds buy Russian short term GKOs yielding 150% - 200%, annualized. Market expectations= G7 debt bailout and possible 15% - 25% Ruble devaluation. Exepected profit = difference between GKO yield and Ruble's expected new value (plenty of room for profit even if Ruble would be devlaued by 50%). Un-expectations= G7 ignorance, Russian debt default. Result= A whole lotta pain.