Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: isopatch who wrote (19134)	9/18/2002 1:54:27 PM
From: 4figureau	Read Replies (2) of 36161

Indeed it is... have been waiting for this since October 98. Another area has caught my attention today. Russell says watch for the next foreclosure numbers later this week or soon. What about the 30 year record from the FHA earlier this week? Thinking out loud.. Take the Schwab 1800 layoffs as a yardstick around NA..but also Europe, Hong Kong (HK announced record bankruptcies yesterday) and Japan Etc. Now a true story from a friend's wife who sees the foreclosures at work: A broker put 300,000 down on a 3 million penthouse a while back...and recently decided that it was easier to give the keys to the bank and walk away. Times that by a few hundred thousand high flyers over the next 6 months...and KAPOW!!! Never mind J6P...he has his problems as well. Read this today from Mcavity on Russwinters thread....mind you we have to double these numbers..and then some for the Wall Streeters: >>You can only get 2x leverage on your stock account, but upto 20x for your house. If you assume a family with 150,000 USD in stocks at 2:1 leverage, and a 400,000 USD at 10:1 leverage. Now the family thinks it is worth 550K. Yet all that is required is a 50% fall in stock and a 10% fall in house prices for all the real shareholder equity to go. People look at the wealth effect, but do not take into account the leverage of it.<< Russell is right...the Dow/NAS Margin has to come down another 100 billion before the cleansing is done...and look at the spin-offs from that alone! 32 Trillion in credit to be cleansed before this is over? Not exactly...but at least 100 plus, plus, plus times the total market cap of all gold stocks combined is my guess. Will gold get some of that fear money? As I have said before...trillions more in paper will burn before (7 trillion is not enough!) one ounce of gold melts...and the gold that does melt...will turn into jewelry :) China expects jewelry sales to reach over $ 20 Billion over the next 8 years...just about the time the Kondratieff (31st month as of now) winter should subside. Hang on tight!

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