EFTA01851795.pdf

To: Barrett, Paul S From: Jeffrey Epstein Sent: Mon 10/3/2011 1:54:35 PM Subject: Re: Update ok On Mon, Oct 3, 2011 at 3:53 PM, Barrett, Paul S wrote: Jeffrey We are now up 51.IMM for the year and down S5.8MM since inception. We arc still seeing more funding stress in European banks. We own 2.5MM face of the ING Pfds which I think we should sell. The company tried to call these at par earlier in the year but the Dutch govt rejected this request and the long spread duration embedded here makes us think we should cut. We paid 97 for them. Would work 72 to sell. In the US we should sell the 2MM of our Wachovia Pfds we own. Same story — just looking to reduce financial pfd exposure. Paid 93.50. Would work 83.00 to sell. We have protection on half our MS and Telefonica positions. Corn was down 5% on Friday's inventory report. We are still up 51.5MM on this position. I think we spend some of these profits on a I month put. If China fears accelerate there could be significant downside from here and would like to protect these gains. Let me know Paul EFTA_R1_00245934 EFTA01851795  Paul Barrett, CFA From: jeffrey epstein [mailto:[email protected]] Sent: Tuesday, September 27, 2011 2:26 PM To: Barrett, Paul S Subject: Re: Update Ok Sony for all the typos .Sent from my iPhone On Sep 27, 2011, at 8:23 PM, "Barrett, Paul S" rote: Jeffrey I think we should take advantage of the recent rally to trim some positions that either have limited upside (like our Barclays Pfds and Citi Pfds) or are at risk for further downside if Europe does not ratify the expanded EFSF. EFTA_R1_00245935 EFTA01851796  Recommendation: - trim our CIT from 10MM to 5MM. Would sell $2.5MM of both the 2016 and the 2017 maturity. We arc up on both positions - collar''/: our MS exposure for 1 month. This would entail buying a 14 put and selling a 17 call. Cost around 10c/share - collar 1 2 / out Telefonica position for I month. 13.50/15 collar. Cashless. I will call you to discuss. Paul Paul Barrett, CFA Managing Director From: Barrett, Paul S Sent: Wednesday. September 21, 2011 3:52 PM To: 'Jeffrey Epstein' Subject: Update Hi Jeffrey We are still doing some more credit work before we close the SSMM Harrah's note. EFTA_R1_00245936 EFTA01851797 Since the end of August the account is down around $2.7MM (was flat at the end of Aug).This translates into -$6.98MM for 2010 and +$4.25MM YTD for 2011. This has been due to (changes since End of August): SOD down 5% ($500K) INR down 5% ($500K - We switched both of these forwards into options so we have limited downside from here on out CADJPY down 150K [We are long the 83.25 CAD Call and Short the 76.00 Put with a knock in at 71; spot at 76.50; knock in 7% away) Oil call down 140K Corn down 600K ING Pfds down 200K MS Note knocked in down 140K Telefonica note down 300K [Stock is trading below 2009 lows; only 35% of their revenue comes from Spain; would HOLD) I would like to reduce further downside. I think the cheapest protection out there remains buying CDS on Asia. For example Indonesia CDS costs 220bps. It got as wide as 1200bps in 2008. It feels like Asian credit spreads remain one of the few things that have not moved and could provide some cheaper tail risk if things deteriorate further. Financial Pfds remain our largest notional exposure (around $20MM). I think we should reduce some exposure here. Would involve selling some of JPM, Barclays and Citigroup. MC and WFC was downgraded today and would also trim those positions. Do you have time to discuss? EFTA_R1_00245937 EFTA01851798  Paul Paul Barrett, CFA Managing Director This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://www.ipmorgan.com/pages/disclosures/email. This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at www jimnorszan corn/pages/disclosures:email. ***4.4.4.4.4.4.4.*********************************87gakEtAkEtAkEtAkEtAkEtAkEtAkEt The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this EFTA_R1_00245938 EFTA01851799 communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA_R1_00245939 EFTA01851800