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Non-Tech : TD Waterhouse Group (TWE)

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To: BWAC who wrote (1190)	4/16/2000 4:12:00 PM
From: Proton	Read Replies (1) of 1413

Re: Gee, I Thought Making Money WAS the Point! I think all this margin comparison to revenue percentages is kinda missing the exact point. I respectfully disagree. The last few weeks cooled the ardor of many margin players. Others will not be able to get back into the game. Less margin borrowing means less interest revenue. In Waterhouse's case, that could decrease overall revenues by 3-10%. The impact on profits is even greater. So why is it so unreasonable to think that customers in aggregate will continue to borrow at that same paltry 7% rate? 1. Because that "paltry" rate is (er, was) the highest in the post-Depression era. 2. Because a large proportion of customer assets cannot be margined (retirement accounts, mutual funds, or trust and fiduciary accounts). 3. Because a lot of the heavy margin players are gone -- GONE, I tell ya! -- after last week. 4. Because the light margin players were burned too badly to replace the heavy margin players. 5. Because cash punters are too smart -- or scared -- to get into the margin game right now. Even if it's a great time to buy on margin. Figures can lie, but the existence of figures does not imply the existence of a lie. Numbers, like facts, are stubborn things. Regards, P.

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