To: epstein, jeffrey (jeevacation@gmail.com)[epstein, jeffrey (jeevacation@gmail.com)]; jeevacation@gmail.com[jeevacation@gmail.com]

From: Jeffrey M Matusow
Sent: Tue 5/18/2010 7:27:05 PM
Subject: Euro at 1.22

Germany banning naked short selling and naked short sovereign CDS positions. GBP trading down to 1.43

Gold bounced from this morning's levels back above $1225.

The index I mentioned this morning - iTraxx Europe - consists of 125 large European corporates. We should buy this as a hedge to the Dividend position. It costs 1.2% a year. If Europe blows up it will trade higher to offset a fall in the Dividends. If Europe ends up ok and the iTraxx Europe returns to pre-crisis levels, you likely lose 50bps - but the Dividend position will be fine.

Let's discuss.

Jeff

Jeffrey M. Matusow

JPMorgan Private Bank 140 West 57th Street. 33rd Floor. New York, NY 10019

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