Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: GROUND ZERO™ who wrote (44013)	10/16/1999 10:38:00 AM
From: James F. Hopkins	Read Replies (1) of 94695

GZ; He was urging caution to the banks about what is know as "JUNK" bonds but he didn't want to say "Junk". There was a 1000 tons of "junk bonds" sold this year..cooperate debt leaves are too high. A BK always hits when the high interest "junk bonds" start failing, and he is nervous about it and all the amounts the banks hold. A lot of stock buy backs and mergers have run stocks up, a lot of the buy backs and mergers were funded not just with money and stock but by creating junk bonds. As cooperate debt gets high it puts a real strain on profits..and it's a lot like margin but the rates are higher. The bonds are aginst the real asset value of the company but that is often way over stated on top of that if a market sell off starts the value of assets drop very fast. Any way it's dept all the way around that has him concerned. --------------- What I found funny was his thing about Y2k saying "it might turn out to be like the dog who didn't bark" To hell with the "bark" what if that bastard bites.. While he says the majority arn't worried and won't cause a problem what he didn't say is if only 10% of the people pull out of a leveraged market it's a big huge problem. It don't take a majority to crash things..any time 10% more tries to get out than get in the market can lose ground like a plane falling out of the sky. It takes almost 2% more getting in than out to run the overhead, even at 50in/50out the market will start down. Most of the rallies we have had since July 17th have been shorts taking profits, and due to companies getting bought by another at a premium..will buy out premiums can only take the market up so far , at the same time it also reduces the profit & all the accretive bull shit and savings generally means people lose jobs and can't afford to buy into the market..many even have to take money out. ------------------------- I don't see the BK yet ..but I know it will come the big factor will be demographics , as more and more people get old and the age percentage gets UP to them who are retiring..with out more new money coming in than going out the market can't work it works just like a sophisticated ponzi scam. If he sees enough risk in junk bonds to talk as strong as he did about it what do you think he sees in stocks. ? Jim PS Message 11517732 couldn't get shares to short Tuesday so I bought short term puts on the qqq.

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