[FoRK] August 2007 Update of The Second Great Depression

Adam L Beberg <beberg at mithral.com> on Wed Aug 1 21:24:42 PDT 2007

Lion Kimbro wrote on 8/1/2007 7:01 PM:
>   * Is it possible that the leverage is so high, because expected
>     changes are so small?

But 1% currency moves in a day or two are common now. But yes, in theory 
that's the idea. Lookup the Yen Carry Trade. If the Yen rises 5% some 
unfortunate day, or the dollar falls, the US markets go poof. It's 
happening, just in slow motion. Housing is crashing in slow motion too.

>   I don't know what that means, "client absorbs all risks
>   associated," but I wonder if that means you have to have some
>   extra cash on hand available, beyond just the leveraged cash,
>   or if they're going to eat you out with a spoon if you lose, or *what.*

Same thing that happens when you lose to a bookie. But they wear suits.

Adam L. Beberg

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