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Wells Fargo & Company Message Board

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  • biggatorhear biggatorhear Jan 31, 2013 10:20 PM Flag

    Only when the tide goes out do you discover who's been swimming naked.

    But bear in mind that a bear run on Apple benefits many market players – especially the investment banks that sold one-year high yield notes to investors that repay them not in dollars but in shares of Apple. If Apple's price has declined significantly from the issue date of these notes (which have a face value equal to the price of Apple stock on the notes’ issuance date) then the banks make a lot of money on the deal. A note priced at Apple's former price of $700, even at 8% monthly, would pay out $56 in interest. But if Apple’s shares stay at $450 until these notes mature in just a few months, the issuing banks will pay back $250 less than they borrowed – a 35% profit!:)

 
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