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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: chic_hearne who wrote (26140)	10/9/2000 11:34:24 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

<< the guys boss quietly reccomended to all his traders that they immediately pay off all outstanding debt they have. He told them to pay off car and home loans if they could>> This is speculation on my part, but it could be that they got wind of the rumors of some of that Telco junk defaulting and affecting some major players. Remember that a lot of that debt has been "insured" via derivatives covered by counterparties who are in no way capable of paying if the Big $hitter hits. Noland talks about that scenario frequently (err, well, CONSTANTLY). Think about the implications....all assets at a major brokerage or money center bank (I won't say which one(s) but they might be the ones that sound like the firm in Boiler Room). Think about the ripples that liquidity black hole would cause...it would suck up capital into money heaven worldwide. Lots of forced selling, margin calls, broker lamentations, more selling, MF redemptions, etc. Suffice it to say, markets will be WAY down if the real LLCF ever comes to pass, probably something like 1000 'Dung points, 2000 DJ points, and 200-300 S&P points. The ClownBuck would be toast as the Euros would pull out en masse (at least out of anything with liquidity) In that scenario, the only ones left able to pay debts of any kind are the folks who moved into gold, cash, shorts and poots. The shorters and pooters may not be able to collect their winnings at the casino cashier window however...since most people who have brokerage accounts have their liquid assets or "cash" in money market funds, they could lose that too, via an unwinding of the debt/commercial paper/asset backed securities markets in response to the original fallout from junk defaults. Furthermore, the SIPC (that supposedly "insures" investors accounts in failed brokerages) won't be there (see the recent NY Times article from 2 weeks ago or so...very scary read). In that setting, even if you've beaten the investment "reaper" you could still lose whatever you've got big debts on. Therefore the sage advice to pay down debt and get as liquid as possible....I seriously considered selling my home and renting for the next year or two, both to avoid the remaining debt on the house (which ain't that much at this point) AND to benefit from the inflated values caused by the real estate Bubble. I figured I could buy back dirt-cheap from some distressed Clown after the "gold-rush" was on... I haven't done it, and I hope I don't end up wishing I had.. You've read books on the 1929 crash lately. Notice how many people not in the market still got wiped out, thanks to the banks failing? This could be the high tech version of that... The best exit strategy, IMO, is to set up wire transfer service from your broker to FDIC insured banks. They max out at 100K/account, so use as many different banks as you need to cover your whole account. You'd need to be nimble in transferring assets, and would probably want to move some of it (in fact most of it) before the real LLCF hits. Sad but true. Once you're in FDIC land, you're fairly safe, but I'd still keep some physical gold locked away just in case things don't work well for a while. Some cold caysh ClownBux might not be a bad idea either (even though they'll be sinking like a stone, a little can't hurt). When this thing really gets going, NO ONE knows what the full implications and extent will be. It may be true that ALL clowns will get destroyed, including the regulars on this board. But your buddies friend got some sage advice, IMO...

To: chic_hearne who wrote (26140)	10/10/2000 9:18:10 AM
From: LLCF	Read Replies (1) \| Respond to of 436258

< In this latest downdraft, the guys boss quietly reccomended to all his traders that they immediately pay off all outstanding debt they have. He told them to pay off car and home loans if they could. His friend lost over $1 million in this latest downdraft. One day was $250,000 alone.> Ho ho... insurance salesman!!! Got [short] Poooooots? DAK

To: chic_hearne who wrote (26140)	10/10/2000 10:07:21 AM
From: pater tenebrarum	Read Replies (2) \| Respond to of 436258

the implications of falling stock prices w.r.t. employee stock option plans are indeed grave. for one thing, big cap techs like CSCO and MSFT never paid a cent of federal income tax over the last year due to tax credits received when employees exercised their options. the amount of tax credits in both cases is equal or surpasses net profits. in other words, no stock options exercises, no profit. it is a huge pyramid scheme, the continued existence of which depends on rising share prices. as stated before, it is certainly true that the stock market has become very important to the real economy...it dwarfs the real economy in transactional volume and many of the 'virtuous cycle' components depend on the stock market's performance. conclusion: there will be a big effort to keep it going...