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Technology Stocks : Globalstar Memorial Day Massacre -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (290)	6/5/2000 12:55:00 PM
From: JMD	Read Replies (1) \| Respond to of 543

Mq, "Does that all make sense SurferM?" The short answer is 'yes' but as an academically trained economist, I've honed the art of ambiguity to a fare-the-well so permit me to obfuscate. It is very astute of you to understand that you have effectively shorted the dollar by 'borrowing' it and then transforming it into a different asset class known as equities, specifically GSTRF and the Mighty Q. You are indeed short the dollar and long equities. The interesting question here is risk. The Japanese folks are said to be notoriously risk averse and have stashed literally trillions of yen in their postal saving system earning a princely 1% per annum (or less). They are long the asset class known as 'cash'. However, it is at least questionable if they have fulfilled their objective of minimizing risk. The fact of the matter is that each asset class carries risk as owners of monetary assets during an inflationary period have come to know. The Japanese folks are suffering asset erosion at kind of a water torture rate, but it's very nasty none-the-less. When the Japanese bought US Treasury obligations during the 1980's when the yen was trading nearer 100 to the $ and got repaid when the yen was pushing 130-140 they took a currency rate hit that was in the hundreds of billions. I guess the point is that holding monetary assets ain't no panacea for the 'risk averse'. This is not, however, to say that there isn't a time when 'cash is king', i.e., when monetary assets come into their own. Jesse Livermore selling out before the great stock market crash (and everybody else holding cash during the 30's) were in hog heaven, simply because other asset classes (stock equities, real estate equities, and loaves of bread) were depreciating relative to cash. Which gets to the real point: if the particular asset class you're long appreciates, you're a happy camper and it doesn't make any never mind if that asset class is stocks, socks, cash, or Beenie Babies. If you've bought a boat load of one of 'em with borrowed assets to 'magnify' your position, then you're playing a slightly different game. What you bought has to go up at least as much as the cost of the borrowing to come out O.K. If it goes up more, you are no longer just a happy camper, you're a wildly happy camper. If your chosen asset class goes up while the cost of the borrowing you chose to purchase it goes down, your happiness can no longer be described on a family web site. Ask all those happy American homeowners on 6% fixed rate mortgages watching their home values go through the roof while they repay their loans in cheaper, inflation eroded dollars (and deducting the interest on their taxes to boot!). This little mechanism is arguably responsible for creating the American middle class all by its lonesome. Prudence does require me to point out the obvious however: these scenarios can and do reverse themselves as your link demonstrates with the poor guy that got wiped out using margin to buy declining stocks. It's all about asset classes and their relative rates of appreciation/depreciation. None is inherently 'safer' or 'riskier' than the other, though leverage can intensify the net result. best, SM

To: Maurice Winn who wrote (290)	6/7/2000 9:32:00 PM
From: FJB	Respond to of 543

X-class flares have erupted over the last few days. G*'s LEO satellites are somewhat shielded by the magnetosphere, while GEO satellites have NO protection. Maybe that will cause the short squeeze. Just kidding, but something to consider. spaceweather.com

To: Maurice Winn who wrote (290)	6/9/2000 3:51:00 PM
From: S100	Read Replies (1) \| Respond to of 543

Globalstar launches Chinese satellite service RDSL 09 June 2000 Globalstar has launched a commercial mobile satellite phone service in China. China Spacecom, service provider partner of Globalstar, is initially offering fixed-phone and mobile services from Globalstar's gateway in Beijing, China. The services include voicemail and short messaging services. An extra two gateways are due to be completed in Guangzhou and Lanzhou, both China, in early 2001, offering coverage throughout the rest of China. Over the coming few months, Internet access and fax will be added. totaltele.com