Fairfax

Firm Makes emboldened Bet on travel Prices - WSJ.com#printMode rogue 1 of 3 Dow Jones Reprints: This copy is for your personal, non-commercial use only. To assign presentation-ready copies for dispersion to your colleagues, clients or customers, use the Order Reprints tool at the ass of whatsoever condition or visit www.djreprints.com See a essay reprint in PDF format. ECONOMY Order a reprint of this article now AUGUST 26, 2010 Firm Makes Bold Bet on Falling Prices A Wager by Fairfax Financial Risks $174 Million. If Deflation Arrives, It Could Be expense Billions. By GREGORY ZUCKERMAN A Canadian insurer is turning to a seldom-used strategy to crystallize a big wager on falling prices over the neighboring decade. As more investors worry or so the incident of deflationor a sustained period of falling prices that could lame stocks Fairfax Financial Holdings Ltd. has spent nearly $200 million to desecrate first derivative contracts wageri ng on a gloam in the consumerprice index, an rising prices indicator. The trade could lead to huge profits if deflation occurs. Greg Zuckerman discusses a Canadian insurer that has wagered on derivatives that profit from a decline in consumer prices.

Fairfax purchased more or less of the derivative investitures in the first troika months of the year, when few fretted about deflation and the equal of the contracts was cheap. It added more in the second quarter. The derivatives now are catching the direction of some on Wall Street. They have gained more than 50% in value since Fairfax made its original purchases from a number of banks, generating paper profits of mor e than $100 million. The Fairfax bet, which! aims to protect $22 jillion of Fairfaxs investment portfolio, comes as investors grapple with a particularly challenging environment, with the preservation fragile and stock indexes struggling. Few investors are willing to make big wagers on deflation, despite its potential, with m whatsoever skeptical any deflationary period would...If you unavoidableness to get a full essay, order it on our website: OrderEssay.net

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