RE: Currency Hedging

they forced him to trade on Friday. I want my money back

-----Original Message-----
From: Shankman, Jeffrey A.
Sent: Monday, October 22, 2001 1:29 PM
To: Lavorato, John
Subject: RE: Currency Hedging

I don't have all the facts to agree or disagree. Until John Z has approval to trade currency, I wouldn't think you would want to go down this path. In addition, I'm sure you know hegding currency this big and late of Fridays is tough.

-----Original Message-----
From: Lavorato, John
Sent: Monday, October 22, 2001 11:50 AM
To: Shankman, Jeffrey A.
Subject: FW: Currency Hedging

By the way, I agree with Zufferli on this.
-----Original Message-----
From: Zufferli, John
Sent: Monday, October 22, 2001 11:46 AM
To: Hickerson, Gary; Stuart III, William; Lavorato, John; Milnthorp, Rob
Subject: Currency Hedging

Given the volatility in the gas market (which is the sole impact on the Canadian power book's US dollar exposure) and the exhorbitant cost involved in hedging multi-year cashflows (i.e. as evidenced by Friday 10/19/2001 trade of -$1,200,000 Cdn new deal value for the 14 year swap that I entered into), I will manage the currency exposure of this book myself, I will hedge appropriately when I see fit and will not accept hedges forced on Enron Canada because of arbitrary position limits set by your department.

John Zufferli