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No, I don't think you're being paranoid. Here's something else to watch -
the spread between 30 year bonds and 10 year notes. After the yield curve
flipped and got stretched the other way, some of these funds must have sold
the bonds and bought the notes thinking of a soon return to the traditional
norm of notes over bonds (remember the faithful "nob" spread?) Now they're
getting hammered by being forced to cover their mistake.
Happy trading,
Pete Hallock
-----Original Message-----
From: ariel@xxxxxxxx <ariel@xxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, October 02, 1998 1:59 PM
Subject: Long Term Capital Management
>Rt's
>There have been some excellent posts explaining just what LTCM did and
>did not do to get themselves in trouble. I hope some of you saw the PBS
>piece done on LTCM last night. What troubles me are the leverage
>numbers. They are absolutely staggering. I mean they had 3.5 billion
>dollars and had bets out worth approx. 1025 billion dollars. 300:1
>leverage??!! Greenspan said there is no way to regulate these off-shore
>funds. And I must believe, with LTCM being considered one of THE top
>hedge funds, that there were many other hedge funds following their
>lead!! I don't think this is over yet. Am I being paranoid here?
>
>Regards, Harry
>
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