[azhenfud]

PING

How about your perspective?

[RebelBanker]

Well, SAJ is obviously the expert in this area. My humble opinion as a commercial credit guy in a bank is that any type of hedge contract is very risky and should be left to specialists. We do use interest rate hedges from our own capital markets folks, but only in very specific cases. I really can not see us being able to use this type of instrument to do something like lock in a collateral value.

However, I just forwarded this article to our CFO and will let you know what he thinks.

[RebelBanker]

Just spoke to the CFO.

His first thought was to leave this sort of thing to the experts - amateurs almost invariably get burned in highly complex markets because the pros understand the game much better. Even if you believe that the pros do not have and use inside information, their knowledge of the market and ability to watch it more closely give them an enormous competitive advantage.

Second thought - who would invest in 'long' positions? He and I figured that anyone who wants to bet on the real estate market gaining would buy into REITs or real estate mutual funds if they were not willing or able to purchase properties outright.

Bottom line - go to Atlantic City or Vegas if you want to gamble. The shows are better and you have a better chance of controlling your losses.