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The stupid (arrogance) of large commercial banks (and much of Wallstreet)
should never be underestimated...... of course maybe they knew that they
would get bailed out if they cried loudly enough. CNBC reported that on
the book cash was leveraged at 50 - 1 and that lenders in effect were
leveraged @ 200 - 1. INSANE!!!!.
>New York Times had an article today on John Merriwether's Long Term Capital
>. Essentially, it states that the NY Fed Reserve had to bail them out else
>if they started to unwind their $90 billion portfolio, it'll cause other
>portfolios to collapse. What I like to know is how did they get so much
>leverage (their capitalization was about $4billion..now down to about $2
>billion) ?
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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