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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: SJS who wrote (82058)	12/19/2000 9:30:34 AM
From: Tommaso	Read Replies (1) \| Respond to of 95453

In order to take on margin debt you have to have equity. So the higher levels of margin debt over the past year reflected the borrowing power of higher equity. As the markets sink, many so-called investors on margin will have their equity totally wiped out and be left with nothing but debt. This is hardly the basis of a renewed bull market. More on topic here: far-out natural gas futures remain surprisingly low. If I were a fertilizer manufacturer who had hedged heavily into the present market (i.e. held contracts for gas at under $3.00, as many do), I would sell the contracts, buy further out contracts, shut down the business mostly, and put the money in the bank for a year or two. Result? Farmers bankrupted by high fertilizer prices, higher food prices, maybe even shortages, and general stagflation. Energy prices also could contribute to this.