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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (13941)	1/25/2002 4:34:03 PM
From: Maurice Winn	Respond to of 74559

>>So, people can end up owing money to brokers if the shares travel down in price too fast for brokers to sell them to pay the debts.<< <In those cases, I guess people can be ruined. I was thinking they couldn't owe more than they had in the account. > CB, I'd be surprised if there are many or any of those instances. Sharemarkets didn't collapse overnight and almost invariably, people have a range of shares so one going broke overnight in a step function won't stop the brokers clearing the debts on the way down by selling other assets. I just meant that it's possible and if there was a 1987-style collapse where it happened overnight and in the space of hours, with no chance of selling, the brokers [security holders] can find they are holding a low-value asset and have to hope to recover the debts from the shareholder. I wondered if that would happen after 911 and the markets being shut for a few days. I wondered whether my Sisphean rock would be at the bottom of the hill. I really considered it to be quite likely. But although I well understand the margin-leveraged upward irrational exuberance and the certainty of tidying up of the overly enthusiastic on the downward cycle, I don't believe we are heading for a self-sustaining collapse. There has been two years of tidying up in the USA and a few years recovery from the Asian contagion and LCTM/Globalstar butterfly-crashing-in-Russian-forest financial panic of 1998. Swarms of chastened shareholders have readjusted their lives, spending and employment. Once the dot.bombs, the tech.wreck and telecosmic madness are cleaned up and margin debts moved back to a better balance and interest rates have increased again [a certainty as soon as the fear of global financial failure has passed], the stockmarkets will resume their progress towards Nirvana as the creative genius and productive energy of 6 billion people continues to be brought to bear. Maybe there is more sagging to go. It's quite likely but I'm betting against it [in the case of QUALCOMM and Globalstar debt anyway]. A billion people buying $$billions of CDMA ASICs, and paying royalties on the gadgets, still seems a good bet to me. Humans love communication and they like being mobile. They buy new phones every year or two. They'll all be using CDMA by 2010. Mq