Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 176.67

+1.6%

Nov 12 3:59 PM EST

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To: SKIP PAUL who wrote (88131)	11/22/2000 10:55:25 PM
From: marginmike	Read Replies (1) of 152472

I could but it would take way to much time and space. The fact is some(most hedge funds) are hedged 3x or even 6x They justify their risk by buying options and creating a hedge. The problem is if there is no liquidity, or a systematic problem those options will be worthless because the buyer or seller will be illiquid, or bankrupted. Even so called Market neutral funds would be crushed by systamatic breakdown's. I am not saying this will happen, I am just pointing out that the system as it stands has a massive amount of leverage. It is taken for granted because it has assumed full proof hedges. In 1998 LTCM went under but other HF come close to the brink. The margin level of INDIV Investors is near record high's as well. We have individual credit levels also at all time highs. The point? There is way to much of our prosparity based on a credit bubble which is beginning to get deflated. This deflation could snowball into a Mess. I hope it doesnt. Derivitives are not full proof, and when markets seize as they did in 1998 all bets are off.

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