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

To: MythMan who wrote (905)	4/8/1999 9:07:00 AM
From: accountclosed	Respond to of 2794

Henry would do the best job of dissecting the article. I would note that while the numbers are large the author makes several statement which defuse the numbers: 1. Granted, not all derivative positions are at direct risk. Most positions have been countered with offsetting derivative positions with other couterparties. 2. The odds of a catastrophe of sufficient magnitude to wipe out more than a few percent of their derivative positions is perhaps remote. 3. Since most of the banks derivative positions are hedged with offsetting positions with other counterparties (called "netting"), one would be lead to assume that any real risk of loss is almost insignificant. I know you read this, but I gave a summary of what I thought significantly pared down the risks from the gross exposures on this post: Message 8558689 to which Henry responded: Message 8561667 Perhaps he will weigh in with more comments on your article.