Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Stitch who wrote (271)	9/30/1998 10:05:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 2794

Every once in a while an agency will issue a report, or a journalist will write a story, whose underlying theme is that the world's economy is crumbling underneath us. True but also false. At the risk of sounding philosophical, the global economy is always crumbling while it is also growing dynamically in other areas. That is how a dynamic, creative process works. The people who write these articles tend to be focusing to narrowly, just as the people who were writing relentlessly bullish articles were. I've lived through several of these cycles now and yes there are things to be concerned about and risks to be wary of. But I don't see anything at the moment that strikes me as more difficult to manage than the systemic risks associated with the third world debt crisis in the 70s and 80s or the S and L crisis. Yes it requires caution but it is survivable. FWIW the time for caution is when things are going well. Re what regulations are needed. I am of two minds about that. On one hand I very much agree with the market regulating this themselves. I am very proud of my credit dept. We have yet to have any exposure to any of the headline blow ups. We are very active in the all these markets and so far (knock on wood) we have avoided the trouble spots. That is a long term competitive advantage for us and one I like to have. However there does need to be some addressing of systemic risks. My suspicion is that there are two areas that would be most effective. 1) tighten capital requirements and reporting of leveraged exposure to all classes of exposure. 2) tighten rules governing people investing in companies when they have authority to extend credit to those entities. I find it outrageous that senior executives at these firms were okaying ever increasing credit extensions to LTC when they were personally invested in the fund. Henry