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

To: Bobby Yellin who wrote (568)	10/17/1998 7:38:00 PM
From: Henry Volquardsen	Respond to of 2794

He starts out fine but I disagree with several of his conclusions. There have been repeated rumours about both BT and Lehman Bros. I would not be surprised if it is true but have no special insights. I agree the Fed is acting partly out of concern for some large institutions but I do not believe that is the main reason. It is becoming very clear that the Fed's main concern is the potential for a credit crunch. A number of sectors of the financial markets are already frozen. So in many ways what the Fed has done is declare war on credit spreads. Also I don't believe equities are dead. I believe two to three years from now (my investing horizon) equities will be higher than now. I'm not as comfortable about the near term outlook. Re gold, I believe we have seen an important bottom in gold and it will move higher in the coming years. But I do not believe gold will soar, the supply demand structure will work against explosive (70s style) price action. I also find the notion that the Fed is deliberately trying to hold gold prices down laughable. I've heard variations of this from several gold bug conspiracy theorists and they are generally trying to find any reason their beloved metal is not soaring.