Bridge Loan to FoF.
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Nonius
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- Joined: Thu Jan 01, 2004 12:00 am
Bridge Loan to FoF.
I was forced to do this idiotic exercise in graphical from for a link in the fractal hierachy of the bank....the exercise was....suppose the assets of a HF drop by X...what the fuk happens? the assumption was that there were FoF, guaranteed products, and private investors leveraged, AND the HF itself was leveraged ie banks and PBs were extending credit...the result pointed to a melt down and domino effect that is very reasonable.....after I did the exercise on paper, I asked the link in the chain, "and you wanna do what? I wouldn't touch them with a ten foot pole....not even MY ten foot pole".
Chiral is Tyler Durden
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Rookie_Quant
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- Joined: Thu Jan 01, 2004 12:00 am
Bridge Loan to FoF.
Here's another one not to touch with a pole of any well-endowed length...
The cool thing to do in the fof world now is to create 'guaranteed' structures that 'can't' have a drawdown of even 5% (5% drawdown in the fund would cause immediate liquidation...)
Oh, and its got 5:1 leverage. SO the individual leverages up to invest in a 5:1 prodcut that invests in a variety of 2:1 --> 15:1 products.
The cool thing to do in the fof world now is to create 'guaranteed' structures that 'can't' have a drawdown of even 5% (5% drawdown in the fund would cause immediate liquidation...)
Oh, and its got 5:1 leverage. SO the individual leverages up to invest in a 5:1 prodcut that invests in a variety of 2:1 --> 15:1 products.
"Question: If you could live forever, would you and why? Answer: "I would not live forever, because we should not live forever, because if we were supposed to live forever, then we would live forever, but we cannot live forever, which is why I would not live forever," --Miss Alabama in the 1994 Miss USA contest.
"Whenever I watch TV and see those poor starving kids all over the world, I can't help but cry. I mean I'd love to be skinny like that, but not with all those flies and death and stuff." --Mariah Carey
"Your food stamps will be stopped effective March 1992 because we received notice that you passed away. May God bless you. You may reapply if there is a change in your circumstances." --Department of Social Services, Greenville, South Carolina
"Whenever I watch TV and see those poor starving kids all over the world, I can't help but cry. I mean I'd love to be skinny like that, but not with all those flies and death and stuff." --Mariah Carey
"Your food stamps will be stopped effective March 1992 because we received notice that you passed away. May God bless you. You may reapply if there is a change in your circumstances." --Department of Social Services, Greenville, South Carolina
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kr
- Posts: 0
- Joined: Thu Jan 01, 2004 12:00 am
Bridge Loan to FoF.
RRP, ever the wise-worded one!
that's a good phrase - 'lend to own'. Lender liability, seems like it would be easy to get your indemnity b/c most startup HFs aren't looking to sue back. With structures like RQ's example, it's perfect. These people are totally nuts.
that's a good phrase - 'lend to own'. Lender liability, seems like it would be easy to get your indemnity b/c most startup HFs aren't looking to sue back. With structures like RQ's example, it's perfect. These people are totally nuts.
my bank got pwnd