re : corn subsidy govt program analysis vasant ,
thanks . let ' s contact wharton next week .
vince
from : vasant shanbhogue / enron @ enronxgate on 04 / 25 / 2001 10 : 15 am
to : vince j kaminski / hou / ect @ ect
cc : nelson neale / na / enron @ enron
subject : corn subsidy govt program analysis
hi vince ,
nelson and i had a meeting yesterday with the ag desk folks on how to go
forward on the analysis and presentation for this program . the consensus
from the ag side was that the choice of university will be highly politically
driven , ie preferably the university should be from a state that has close
ties to sympathetic senators or other political figures . also it is
preferable if the university faculty have worked on ag issues before , lending
more credibility in the ag community . the names that came up were
mississippi state and texas a & m . nelson knows of a person at mississippi
state who worked with the usda on risk management issues .
the needed analysis itself is not necessarily very deep , and the focus is
primarily to get a non - quantitative presentation out that outlines how enron
can take on the downside risk of local crop prices ( enron probably needs to
cover actual local prices and not simply an index because i do not think the
govt will want to worry about basis risk ) .
the pilot program itself will be very small , and lends itself to continuing
down the path of short term trading rather than long term origination .
another thought on hedging our potential short positon ( on the origination
side ) is that the govt program can only provide a partial hedge to the extent
of the premium received - - we still have unlimited downside from the short .
vasant
p . s . i am writing up jim bouillion ' s project suggestion as a potential
project for wharton . of course , we may still ask wharton for their insights
on the corn price protection approach .
re : corn subsidy govt program analysis
vasant ,
thanks . let ' s contact wharton next week .
vince
from : vasant shanbhogue / enron @ enronxgate on 04 / 25 / 2001 10 : 15 am
to : vince j kaminski / hou / ect @ ect
cc : nelson neale / na / enron @ enron
subject : corn subsidy govt program analysis
hi vince ,
nelson and i had a meeting yesterday with the ag desk folks on how to go
forward on the analysis and presentation for this program . the consensus
from the ag side was that the choice of university will be highly politically
driven , ie preferably the university should be from a state that has close
ties to sympathetic senators or other political figures . also it is
preferable if the university faculty have worked on ag issues before , lending
more credibility in the ag community . the names that came up were
mississippi state and texas a & m . nelson knows of a person at mississippi
state who worked with the usda on risk management issues .
the needed analysis itself is not necessarily very deep , and the focus is
primarily to get a non - quantitative presentation out that outlines how enron
can take on the downside risk of local crop prices ( enron probably needs to
cover actual local prices and not simply an index because i do not think the
govt will want to worry about basis risk ) .
the pilot program itself will be very small , and lends itself to continuing
down the path of short term trading rather than long term origination .
another thought on hedging our potential short positon ( on the origination
side ) is that the govt program can only provide a partial hedge to the extent
of the premium received - - we still have unlimited downside from the short .
vasant
p . s . i am writing up jim bouillion ' s project suggestion as a potential
project for wharton . of course , we may still ask wharton for their insights
on the corn price protection approach .