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September 21, 2007



I read the article in MSN you referred to by Das, a derivatives guru who has seen the light. He ended his article by mentioning Michael Milken. It was a very sobering read.

Your assurance that "$1000 is at risk not $100,000" using a Las Vegas casino example, is flawed. Derivatives are used all around the world without regulation, so it would seem that all the world's funds are at risk. Getting back to your casino: it is as though the house was in collusion with the individual better, and let betters spend the $100,000 *while keeping it in the game*. It can work for a while if you are all lucky and no one is checking the books. But if all casinos did this and people started losing "their money" (the casino's $100,000), how long could the casinos stay in business?

Dick Lepre

My point was only that a small percentage of the total outstanding "bet" was in danger of being lost. Read this piece by FDIC for a more detailed explanation:

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