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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (24840)	10/3/1998 10:54:00 PM
From: Big Bucks	Read Replies (1) \| Respond to of 70976

GM, I don't pretend to understand what derivatives are either, however, they are what caused Orange county to go belly up a few years ago and any time a financial institution has massive investment in such risky plays (with all their high paid/financially educated managers), it is worth understanding the potential implications of massive losses that can't be covered with assets could be catastrophic. It would be like dominoes falling one after the other, as major banks become insolvent. If it occurs it would make the 1929 collapse look like a picnic, and we would definitely have a world-wide depression. It just pays to understand the risks that may have a huge impact on investors and the markets outside of the normal day to day information. BB

To: Gottfried who wrote (24840)	10/4/1998 10:51:00 PM
From: Chuck Williams	Read Replies (1) \| Respond to of 70976

I think BB summed it up pretty well. The journalist is saying: (1) derivatives are RISKY business in today's market; (2) hedge funds took it on the CHIN due to their overexposure; (3) hey, look at how the cornerstones of the world banking system have their asses hanging out in the breeze; (4) GULP. . . I must critique one of his comments. He mentioned you couldn't measure a company's risk due to the reporting rules that are in place. IMHO, exposure = risk, especially today. Also, the Nikkei broke the magic 13,000 line tonight. Wonder if it'll rebound.