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Microcap & Penny Stocks : Green Oasis Environmental, Inc. (GRNO) -- Ignore unavailable to you. Want to Upgrade?

To: John Chylek who wrote (9914)	10/3/1998 2:13:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 13091

The capital of LTCM is perhaps 1% of the total." John, What Greenie fails to discuss is how that $2 billion in capital at LTCM was hyper-leveraged so as to be able to control over $100 billion in assets (options and other derivatives). LTCM was apparently not expecting that lower bond rates would not result in higher stock market prices. Nor did they anticipate a collapse of Russia and how that would impact their positions. What Alan G. was worried about was that if LTCM was forced to unwind those leveraged positions, there would be a loss of liquidity and resulting price damage in those respective markets. Anyone remember when several Estates were apparently being sold into GRNO's thinly traded market and forcing down the price?? Where was Greenspan then?? Regards, Ron

To: John Chylek who wrote (9914)	10/3/1998 10:50:00 PM
From: Charles A. King	Read Replies (1) \| Respond to of 13091

The LTCM people mindlessly used computer programs to model their expected behavior of financial markets. It is one thing to model the the physical world and quite another to assume human behavior conforms to math models. They then made huge bets which went the wrong way. I am not a fan of strict technical analysis when applied to investment decisions, and the past 1 1/2 years of GRNO history features many decisions that defy common sense. From the Nando article: The fund had about $2.2 billion in capital from its investors, but it borrowed money from financial institutions to buy securities worth more than $90 billion. Fund managers then used those securities as collateral to make speculative bets representing $1.25 trillion. You and I are allowed by the SEC to margin a maximum of 50%. They were able to "margin" about 99.8% using derivatives. According to the WSJ article by Burton Malkielon 9-29-98: "It is estimated that some $200 Billion of capital has been invested in hedge funds. The capital of LTCM is perhaps 1% of the total." If Greenspins assessment of the potential LTCM damage to global economies is correct, then the bull market in the US is a house of cards. If all the above is true, then extending the LTCM example to all of the $200 billion means that about 113.6 trillion in US dollars is riding on these kinds of characters making all the right decisions. Greenie says these people shouldn't be regulated because if they were they would leave the country. I would say good riddance. The reason most of the Far East is in a depression is that those governments allowed the same thing. They allowed banks to operate in secret, buying stocks and real estate, causing asset inflation. The asset inflation allowed them to borrow more on their assets which allowed them to buy more stocks and real estate. And now some of our politicians and bureaucrats want our tax money to bail them out as usual. Charles