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Technology Stocks : Semi Equipment Analysis

SOXX 309.40

+1.0%

Dec 5 4:00 PM EST

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To: Gottfried who wrote (11808)	9/25/2003 8:27:03 PM
From: Sarmad Y. Hermiz	Read Replies (4) of 95531

Gottfried, re >> salute Thanks for the info on margin levels. But regarding the discussion of margin. Even if I buy stock on margin, the seller receives money which adds to their cash account (or reduces their margin). So the fact that I might be in margin up to my neck, means that someone else has lots of cash - with which to buy my stock, if she so chooses. Which got me to thinking about all that money that is on the so called sidelines. $2 trillion or so. Apparently that money got there from people selling stock. But the exact amount was removed from the buyers' account. So the money "on the sidelines" can neither increase nor decrease. Except from creation or destruction of money by acts of the central bank. It is sometimes asserted that low interest rates will prompt people to sell bonds and buy stocks. But when people sell bonds, money is transferred to their account from someone else's account. So the aggregate amount of money stays the same. I think the only way true new demand for stocks can occur is that if foreigners take dollars out of their mattress and deposit it into a US bank and use it to buy stock. Sarmad

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