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From: Jeffrey Epstein <* evacatio mail.com> To: Jes Staley < Sent: 5/6/2010 3:38:31 PM Subject: keep confidential„ nytimes Attachments: Reserve Losses.pdf ------ Forwarded messa e From: Landon Thomas Date: Thu, May 6, 2010 at 10:16 AM Subject: Fwd: Central Banks' Losses from EURUSD this Year: USD300 Billion and Counting To: "Epstein, Jeffrey" <jeevacation@gmail.com> time to double down? ------ Forwarded message --------From: Stephen L Jen <SJenebluegoldcap.com> Date: Thu, May 6, 2010 at 2:59 PM Subject: Central Banks' Losses from EURUSD this Year: USD300 Billion and Counting To: Stephen L Jen <SJen@bluegoldcap.com> Central Banks' Losses from EURUSD this Year: USD300 Billion and Counting Stephen L Jen May 6, 2010 Bottom line: Central banks have sustained USD300 billion in valuation losses (YTD),from the depreciating euro. The level of angst at these central banks may be elevated now and the risky are rising that some qf these central banks de-rate the euro. Total foreign currency mserves held by all central bank have reached USD9.0 trillion, with the top-8 reserve holders managing some USS5.3 trillion. Qf this latter amount, USS1.55 trillion (or 30% qf the total) is held in euros. Corresponding to the 10% depreciation in EURUSD year-to-date, the top-8 reserve holders may have suffered close to USD200 billion in valuation losses, and for all central banks the total valuation loss has been around USD300 billion. We guesstimate that (him (SAFE) may have suffered a USS80 billion in RIR valuation losses, USS1-1 billion for Russia, and ULSS7 billion for Korea. These figures do not include actual and potential fi rther losses on their underlying holdings of European bonds. IfEURUSD trades down to 1.2150, all of the monetary gains from the dollar-to-ern.° diversification in the past decade will be lost. SONY_GM_00077708 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00000835 EF1'A_00188177 EFTA01300573 ---PAGE BREAK--- (I) Central banks' reserve managers are presumably reconsidering their dollar-diversification strategy, now that the earn is also found to be less than a perfect 'anti-dollar'. (2) The risks of further declines in the euro and a possible debt rescheduling in Europe are likely to be sources of additional worries for central banks with large exposures to the euro. (3) In addition to central banks being concerned about the euro, the euro-selling process has only just begun for the large real money institutional fi nds, and the potential for much larger jimds to reduce their euro exposures is significant. Since January, my mental target for EURUSD has been 1.20. Howeven I now think the risk to RIME) is heavily biased to the downside relative to this figure. slj Stephen L Jen Managing Director of Macroeconomics and Currencies BLUEGOLD BlueGold Capital Management LLP 4 Sloane Terrace, SW1X 9DQ London, UK 71 F: M: E: W: www.blueaoldcao.com Authorised and regulated by the Financial Services Authority Confidentiality Notice Copyright material and/or confidential and/or privileged information may be contained in this e-mail and any attached documents. The material and information is intended for the use of the intended addressee only. V you are not the intended addressee. or the person responsible for delivering it to the mended addressee. you may not copy. disclose. distribute. disseminate on dein*, t to anyone else or use it n any unauthorised manner or take or omit to take any action in reliance on It. To do so is prohbited and may be nlawful. The views expressed in this e-mail may not be those of the Company from which it has come but the personal views of the originator. f you receive this e-mail n error. please advise the sender immediately by using the reply facility in your e-mail software. Please also delete this e-mail and al documents attached immediately. Many thanks for your cooperation. Registered Office 42-44 Portman Road. Reading. Berkshee. RG30 I EA Registered No OC331798 Landon Thomas, Jr. Financial Correspondent New York Times Office pho Mobile SDNY_GM_00077709 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00000836 EFTA_00188178 EFTA01300574 ---PAGE BREAK--- *********************************************************** 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 communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com, and destroy this communication and all copies thereof, including all attachments. SDNY_GM_00077710 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00000837 EFTA_00188179 EFTA01300575