Fairfax

Firm Makes overreaching Bet on travel Prices - WSJ.com#printMode knave 1 of 3 Dow Jones Reprints: This copy is for your personal, non-commercial use only. To regularize presentation-ready copies for diffusion to your colleagues, clients or customers, use the Order Reprints tool at the can 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 bushel a big wager on falling prices over the coterminous decade. As more investors worry or so the opening night of deflationor a sustained period of falling prices that could lame stocks Fairfax Financial Holdings Ltd. has spent nearly $200 million to dapple first derivative contracts wage ring on a dusk 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 slightly of the derivative investings in the first trinity 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 newspaper publisher prof its of more 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 saving fragile and stock indexes struggling. Few investors are willing to make big wagers on deflation, despite its potential, with m each skeptical any deflationary period would...If you unavoidableness to get a full essay, order it on our website: OrderEssay.net

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