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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 155.15+2.1%Nov 26 3:59 PM EST
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To: Investor2 who wrote (3034)10/25/1997 12:10:00 AM
From: Defrocked  Read Replies (1) of 10921
 
A 10 percent market drop is not necessarily
a crash although the press would portray it
that way. A "crash" suggests a resulting depression
or recession. A return to January levels, OTHO,
may only slow spending, possibly even computer
purchases.

Credit swaps are derivative instruments that
exchange the risk of credit deterioration of (1)
a specific issuer against an index of credit risk
or (2)a change between two indices. Instead of
selling, for instance, IBM debt against 10 Yr.Govts.
a credit swap will achieve the same net result
with less cost. A common index "credit spread"
has been traded at the CME for years and is referred
to as a TED spread(U.S.Tbill rates vs. Eurodollar rates).
Typically, flight to quality shows up as an increase
in credit spreads during business deterioration while gains
in the quality of issuers occurring in business cycle
upswings decrease credit spreads. The market is currently
suggesting the former i.e. credit deterioration.

I agree with your general long term outlook but
needed put protection to reduce my short term
nervousness. I don't think the sky is falling
but for some it may unfortunately feel that way.
I'm glad to be wrong and appreciate the discussion.
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