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

To: Henry Volquardsen who wrote (373)	10/5/1998 12:34:00 PM
From: Worswick	Respond to of 2794

Henry thanks for the insight. On the subject of the LTC $1 trillion figure I know I have seen it only in one place but I saw the figure again today on the PEI site cited by Morgy. To wit, "....The implications of this hedge fund disaster presents a new twist to the Panic of 1998 compared to previous debacles in history. Already we are seeing the collapse of Long Term Capital Management causing disruptions to the entire world economy far beyond what the Fed or anyone one else has publicly explained. The Fed has pushed the banks involved in derivative trading to come up with billions to hold the current positions at LTCM in order to facilitate the orderly liquidation of those positions. Several important facts about this issue must be understood. The Fed did NOT put up any public funds; it only put pressure on the banks to step up to the plate. LTCM positions were predominately within the interest rate markets worldwide. The amount of leverage used by LTCM was astronomical, giving it positions in excess of $1 trillion. The impact that LTCM is having upon the entire world economy is significant". Ah, a little understatment along with the breakfast fajitas. As ever you are a credit here Henry for elucidation, punctuality and a windward anchor... in a most difficult subject for the laymen to understand. Hope you are getting through this month OK. My best to you, Clark