Pearls After Swine...

Dear Investor:

Swine flu is a pandemic that is fast spreading across the world and remains a high risk to global economic development.

Clients who wish to hedge their Swine Flu exposures may now consider our Global Swine Flu (tm) Index - An investable currency basket split across asset classes and geographies which uses our proprietary Swine Universal Amalgamated Regressor (SUAR) Model to determine optimal portfolio constituents for complete de-risking.

For the first time ever, investments in this Index are jointly guaranteed by the Fed & the IMF along with the BOJ, ECB, BOE, SNB, ILO & WHO; A study has shown that making pigs safer to eat could boost global GDP output by 0.00002133%, thus offering significant upside potential to global growth prospects.

Our key recommendations based on the model are:

1) Long MXN against CNY

Historically, the number of any sort of cases reported in China (whether they be of swine flu or human deaths) is always less than the actual number, whereas in the current crisis the number of cases reported in Mexico is higher than the actual. To exploit the undervaluation of the MXN, investors can go long at current levels; Decimation of the Mexican Economy is a key downside risk.

2) Short USD against all currencies

The US response to any bad news in any field in any part of the world has been to print more US dollars. The flu crisis will also lead to more dollar printing (to serve as handkerchief replacements) which should lead to further dollar weakness. Major event risks include Timothy Geithner & Ben S Bernanke. With the exit of George Bush, bombing of pig-breeding countries is not a high-probablility risk, though that may form part of the next round of fiscal stimuli.

3) Long INR against all currencies

The Indian economy will be unaffected by Swine Flu. Diseased pigs have ruled India for the last 60 years anyway and the local population has developed complete immunity to any such threats. We recommend going long INR.

4) Long currencies of Osama sightings

The market is pricing a significant possibility of Osama being dead. This gives a boost to fears of Swine Flu as people will eat pork with more impunity if Osama is dead. Swine Flu concerns will recede in countries where Osama is sighted and tactical longs may be entered into accordingly. Getting assassinated before TPing remains a key downside risk.

DISCLAIMER:
Any analysis included in this document is being provided for decorative purposes only. Structure pricing is a function of market liquidity & H1N1 vaccine availability. Market investments are subject to sanity risks. Please do not read the offer document too carefully before investing.